MetLife Europe Insuranced.a.c.

Solvency II Solvency and Financial ConditionReport

For the year ended 31 December 2019

Table of Contents

Section PageExecutive summary 3A Business and performance 9A.1 Business 9A.2 Underwriting performance 12A.3 Investment Performance 14A.4 Performance of other activities 15A.5 Any other information 16B System of governance 17B.1 General information on the system of governance 17B.2 Fit and proper requirements 24B.3 Risk management system including the Own Risk and Solvency Assessment (ORSA) 26B.4 Internal control system 34B.5 Internal Audit Function 37B.6 Actuarial Function 39B.7 Outsourcing 40B.8 Any other information 40C Risk profile 41C.1 Underwriting risk 41C.2 Market risk 42C.3 Credit risk 43C.4 Liquidity risk 44C.5 Operational risk 45C.6 Other material risks 45C.7 Any other information 46D Valuation for solvency purposes 47D.1 Assets 47D.2 Technical provisions 53D.3 Other liabilities 61D.4 Alternative methods for valuation 62D.5 Any other information 62E Capital management 63E.1 Own funds 63E.2 Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR) 69E.3 Use of the duration-based equity risk sub-module in the calculation of the SCR 72E.4 Differences between the SF and any internal model used 72E.5 Non-compliance with the MCR and non-compliance with the SCR 72E.6 Any other information 72Glossary of terms 73Annex: Quantitative Reporting Templates 75

Executive summary

BackgroundMetLife Europe Insurance d.a.c. (the Undertaking) is an Irish incorporated entity domiciled in Ireland andis authorised by the Central Bank of Ireland (CBI) to transact non-life assurance business in Classes 1,2, 8, 9, 16 and 18 under the European Union (EU) (Insurance and Reinsurance) Regulations 2015 (S.I.No 485 of 2015).

The Undertaking’s immediate parent company is MetLife EU Holding Company Limited (MetLife EU) andits ultimate parent company is MetLife Inc., a Company domiciled in the United States of America (USA).

MetLife Inc. operates within Europe through various subsidiaries. The Undertaking leverages the optionsprovided by the European Insurance Directives to "passport" throughout the EU from a single base inIreland. The Undertaking has branches in Italy, Spain, Portugal, France, Slovakia, Czech Republic, andRomania. The Undertaking also operates via Freedom of Service (FOS) in Germany, Austria, Greece,Poland and the United Kingdom (UK). The Undertaking reinsures business from Russia. The Undertaking is focused on the provision of involuntary loss of employment (ILOE) cover, mobilephone insurance (MPI) and travel insurance, as an add-on to MetLife Europe d.a.c.'s core life insuranceofferings. On 2 January 2019, the Undertaking launched its direct-to-consumer (DTC) business via FOSin Poland. The Undertaking's DTC products offer predefined protection packages for accident and healthinsurance cover. MetLife Europe d.a.c. is an Irish incorporated entity authorised to write primarily lifeinsurance business in Europe.

The Undertaking is required to submit the 2019 Solvency and Financial Condition Report (SFCR) to theCentral Bank of Ireland (CBI) as part of the 2019 annual Solvency II returns. The SFCR is preparedpursuant to the Commission Delegated Regulation (EU) 2015/35 (The Delegated Acts) and the EuropeanInsurance and Occupational Pensions Authority (EIOPA) Final Report on Public Consultation No. 14/047.The Delegated Acts supplement Directive 2009/138/EC as implemented in Ireland by the EU (Insuranceand Reinsurance) Regulations 2015.

The SFCR is an annual public document and is available on the Undertaking's website.

ContentThe following summarises the information included in the SFCR by section and notes any material changesduring the year.

A - Business and Performance

Significant business eventsOn 6 December 2019, the Undertaking paid a dividend of €12.9m to MetLife EU. The directors weresatisfied that there was sufficient solvency cover, based on the Own Risk and Solvency Assessment(ORSA), to support the payment of the dividend. In addition, there were sufficient distributable reservesunder International Financial Reporting Standards (IFRS) based on the Companies Acts 2014requirements.

The impact of the COVID-19 virus is as a consequence of events that arose after the Undertaking'sreporting date of 31 December 2019, and therefore treated as a non-adjusting post balance sheet event.Since 31 December 2019, the COVID-19 virus has caused a pandemic, and governments and businesseshave taken measures such as travel bans, quarantines, and social distancing to combat the spread ofthe virus.  These have disrupted business activity, as well as causing economic slowdown and significantvolatility in financial markets. The Undertaking activated its business continuity plan with the majority ofstaff working from home, where possible. The Undertaking cannot determine or estimate the extent towhich these events have affected the Undertaking’s operations, business, financial results, or financialcondition. In general under Solvency II, EU insurance companies are required to hold sufficient eligibleown funds on an on-going basis to cover their Solvency Capital Requirement. The risk-based SolvencyCapital Requirement enables insurance undertakings to absorb significant losses and give confidence

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to policyholders and beneficiaries that payments will be made as they fall due. Based on the results ofthe 31 December 2019 Solvency II valuation and of the 2019 Own Risk Solvency Assessment, andnotwithstanding the emergence of COVID-19 (as a non-adjusting post balance sheet event), there is noexpectation of non-compliance with the Minimum Capital Requirement or SCR over the planning horizon.The directors have considered the potential impact of COVID-19 on the Undertaking, and have concludedthat the Solvency II returns will continue to be prepared on a going concern basis.

During 2019, the Undertaking completed the transfer of certain finance and actuarial activities from Irelandto the existing Centre of Excellence in India and new Centres of Excellence in Poland and Malaysia.

The four cornerstones of the Undertaking’s strategy are to optimise value and risk, drive operationalexcellence, deliver the right solutions for the right customers and strengthen distribution advantage. Toexecute its strategy, MetLife Inc. has identified "enablers" such as leveraging digital to help drivetransformation and combat customer confusion and hidden costs by focusing on simplifying operationsand products. The Undertaking is evaluating processes with the view of simplifying or automating wherepossible to ensure it can continually adapt to the environment it operates in.

Business performanceThe financial statements are prepared under IFRS. There is a decrease in IFRS profit of €(1.6)m from€4.1m in 2018 to €2.5m in 2019. This is mainly due to the start up expenses on the new FOS DTCbusiness in Poland and restructuring costs, partially offset by business growth.

B - Systems of Governance

Governance structure and rolesThe key organs of the system of governance are the Board of Directors, Executive Management and thevarious committees. There has been no material changes to the systems of governance over the reportingperiod.

The Board directs the Undertaking's affairs to ensure its prosperity, whilst meeting the appropriate interestsof its shareholders and third parties, such as customers and regulators. In particular, the Board provideseffective, prudent and ethical oversight of the Undertaking.

The Board is responsible for, among other things, where relevant, reviewing and/or setting and overseeing:

• The business strategy;• The amounts, types and distribution of capital adequate to cover the risks of the Undertaking;• The strategy for the ongoing management of material risks;• A robust and transparent organisational structure with effective communication and reporting

channels;• A remuneration framework that is in line with the risk strategy of the Undertaking; and• An adequate and effective internal control framework that includes well-functioning risk

management, compliance and internal audit functions as well as an appropriate financial reportingand accounting framework.

The Corporate Governance Structure is supported by the Executive Management organisationalstructure, which defines key areas of authority and responsibility and establishes the appropriate linesof reporting. The Executive Management is responsible for the day to day running of the Undertakingand is led by the Chief Executive Officer (CEO).

The committees of the Board are:

• Audit Committee; • Risk Committee;

Fit and proper requirementsThe Undertaking's Fitness and Probity Policy sets out the minimum standards, in compliance with theCBI Fitness and Probity Standards and relevant legislation. It is there to ensure that a person, who is

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known as a 'Responsible Person', has the necessary qualities and competencies in order to allow him/her to perform the duties and carry out the responsibilities of his/her position within the Undertaking. Thequalities and competencies relate to the integrity demonstrated by a Responsible Person in personalbehaviour and business conduct, soundness of judgement, a sufficient degree of knowledge andexperience and appropriate professional qualifications.

Risk management and internal controlsThe Risk Management Framework (the Framework) sets out the approaches to risk management andstructure to be followed by all associates in their capacity as executives, management and staff. The keyobjectives of the Framework are to:

• Promote a strong risk culture in the Undertaking, rooted in the Undertaking’s purpose and values,in particular customer protection;

• Ensure consistent, systematic management of risks across all businesses, operations and risktypes; and

• Enable decision makers to efficiently direct the Undertaking’s resources to appropriate businessopportunities that are within the Board’s risk appetite.

A key element of risk management is the Own Risk and Solvency Assessment (ORSA). The ORSA is abespoke strategic analysis which links together all pillars of Solvency II and all areas of the Undertaking.It enables the Board to understand the risks faced, and how they translate into capital needs or alternativelyrequire mitigation actions. The ORSA process is an ongoing and continuous process, of which the annualreport is a complete board-level roundup at a point in time providing a meaningful and useful report tothe Board. The results of the ORSA process and the insights gained in the process provide input into riskmanagement, long-term capital management, business planning and product development and design.One ad hoc ORSA report was prepared during the year, to explore the proposal to sell Accident andHealth (A&H) business into Poland via FOS. The ad hoc ORSA report was approved by the Board andsubsequently submitted to the CBI.

The Undertaking’s Control Framework promotes the importance of having appropriate internal controlsand ensuring that all associates are aware of their role in the internal control system. The ControlFramework sets out clear standards for the design, operation, validation and oversight of the system ofInternal Control. It defines how effective internal control is achieved through joint responsibilities of thegeneral managers and the Heads of Functions.

C - Risk ProfileThe Undertaking is exposed to underwriting, market, credit, liquidity and operational risk. Overall, the riskprofile remained relatively stable over the year.

Underwriting risk refers to fluctuations in the timing, frequency and severity of insured events relative tothe expectations of the Undertaking at the time of underwriting, arising as a consequence of writingbusiness where financial outgo depends upon loss of employment and lapse experience. Underwritingrisks are primarily mitigated through reinsurance, diversification and through limits and guidelines whichare monitored by the Product Management Committee (PMC).

The Undertaking does not take on market risk as a strategic risk. The Undertaking seeks to incur onlyminimal risk exposure as arises from its insurance business. The Undertaking is exposed to market risks,including interest rates due to timing differences of asset and liability cash flows and basis differencesbetween valuation rates, different currencies and positions held to facilitate policyholder transactions.Market risks are primarily mitigated through the Undertaking's investment limits and guidelines.

The Undertaking is exposed to credit risks (i.e. the risk of a value decrease of assets or increase ofliabilities due to the default of third parties, or the increase of the probability of such a default and/or theassociated loss). Exposure to credit risk comes primarily from the investment portfolio and from a numberof counterparties related to risk mitigation. Credit risks are primarily mitigated through asset allocation,diversification and single-exposure limits. For counterparty exposures, the Undertaking may require theplacement of collateral.

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The Undertaking is exposed to liquidity risks where it is obliged to settle liabilities at short notice andassets cannot be liquidated at all or only with very significant haircuts. Liquidity risks are primarily mitigatedthrough asset allocation, diversification and single-exposure limits, and by avoiding entering obligationsto provide liquidity to counterparties.

The Undertaking is exposed to operational risk consistent with other financial institutions, including theimpact of changes in the regulatory and legal environments, the dependency on multiple internal andexternal operators (for investment activities as an example) and complex modelling for financial reportingand solvency reporting. Operational risks are primarily mitigated through functional controls, which areintegral elements of the Undertaking’s Risk Framework and independently validated on a regular basis.

In addition to the risks covered above, the Undertaking may in the future also be exposed to emergingrisks. The Undertaking currently considers geopolitical risk, disruptive technology (includingtransformative technology for insurance distribution (‘InsurTech’) and cybersecurity issues) and regulatorychanges on data protection, business conduct and financial reporting that can transform the insuranceindustry, as key emerging risks.

The Undertaking has a strategic role to support MetLife Europe d.a.c., therefore its success dependsupon the success of this entity. The Undertaking reviews its risk exposures regularly and considerspotential actions to align exposure to risk appetite.

D - Valuation for solvency purposes

AssetsAssets are valued at fair value for Solvency II. This represents the amounts for which the assets couldbe exchanged between knowledgeable willing parties in an arm’s length transaction. The main valuationdifferences between Solvency II and IFRS relate to deferred acquisition costs and intangible assets,which are not recognised under Solvency II.

Technical ProvisionsThe technical provisions correspond to the current amount the Undertaking would have to pay if theywere to transfer their insurance obligations immediately to another Undertaking. The value of technicalprovisions are equal to the sum of a best estimate liability (BEL) and a risk margin. The best estimatecorresponds to the probability weighted average of future cash-flows taking account of the time value ofmoney. The cash-flow projections reflect the expected realistic future demographic, legal, medical,technological, social and economic developments over the lifetime of the insurance and reinsuranceobligations. The risk margin is a fair value adjustment that captures the cost of holding the unhedgeablepart of the Solvency Capital Requirement (SCR) over the lifetime of the policies in force.

The calculation of amounts recoverable from reinsurance contracts follow the same principles andmethodology as presented above for the calculation of other parts of the technical provisions.

Solvency II and IFRS have different rules for classifying/grouping insurance contracts, and these rulesaffect the valuation of the liabilities. Solvency II capitalises all future profits, subject to contract boundaries,whereas IFRS generally does not. Solvency II determines a risk margin, whereas this concept does notgenerally apply to IFRS.

Solvency II requires assumptions to be based on best estimate whereas IFRS may apply Provisions forAdverse deviations to the assumptions used to value the reserves. The Solvency II assumptions arerevised on a regular basis to adjust for recent experience and changes to market factors. The principalassumptions used in the determination of technical provisions relate to demographic, expense andeconomic assumptions.

Net technical provisions have decreased by €(0.1)m from €8.9 m in 2018 to €8.8m in 2019 .This is mainlydue to business, experience and market movements.

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E - Capital Management

Capital Management PolicyThe strategic objectives of capital management for the Undertaking are:

• Regulatory compliance: to ensure compliance with the Undertaking's regulatory capitalrequirements.

• Efficient allocation: to manage and allocate capital efficiently to achieve sustainable returns andfacilitate growth objectives.

• Financial strength: to ensure access to capital markets on competitive terms, so that theUndertaking’s overall cost of capital is minimised.

Taken together, these strategic goals strengthen the Undertaking's ability to withstand losses from adversebusiness and market conditions, enhance its financial flexibility and serve the interests of stakeholders.

The Undertaking's capital is monitored through the capital management process and within theUndertaking's stated risk appetite limits. Any breaches of these limits is escalated in accordance withand as defined by any relevant regulatory or internal policies. The Undertaking's risk appetite recognisesthe regulatory minimum standard, as it applies to technical provisions, own funds and capital underSolvency II, and sets the target ongoing solvency level in order to enable the Undertaking to withstandthe financial implications of adverse experience.

There has been no material changes to capital management policy over the reporting period.

Own funds and SCRThe SCR is calculated using the standard formula approach. This method uses stresses for each of theindividual risks as calibrated by EIOPA. EIOPA also provides the standard correlation matrices for thepurpose of aggregation. It is based on a modular approach consisting of a core of life, non-life, market,health and counterparty default risks with associated sub-modules. These are aggregated usingcorrelation matrices, both at the sub-module and the main module level. The operational risk componentand adjustments for the risk absorbing effect of future profit sharing and deferred taxes are then allowedfor, to give the overall SCR.

The own funds, SCR, solvency ratio and Minimum Capital Requirement (MCR) are as follows:

31-Dec-19 31-Dec-18 Movement€'000 €'000 €'000

Own FundsTier One 31,539 42,663 (11,124)Tier Two — — —Tier Three 635 42 593Eligible own funds for SCR 32,174 42,705 (10,531)

SCR 19,787 18,873 914Solvency Ratio 163% 226% (63)%

Eligible own funds for MCR 31,539 42,663 (11,124)MCR 4,947 4,718 229

Eligible own funds have decreased by €(10.5)m from €42.7m at 31 December 2018 to €32.2m at 31December 2019. The SCR increased by €1m to €19.8m at 31 December 2019. As a result, the solvencyratio decreased by 64% from 226% in 2018 to 163% in 2019. The decrease in own funds is mainly drivenby a dividend payment (€13m) partially offset by business and capital market movements.

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AppendixThis includes all public QRTs.

ApprovalThe SFCR was approved by the Board of Directors on 1 April 2020.

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A Business and performance

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A.1 Business

A.1.1 Overview

The Undertaking is an Irish incorporated entity domiciled in Ireland and was incorporated on 25 June2009. On 10 May 2012, the Undertaking was authorised by the Central Bank of Ireland (CBI) to conductbusiness as a Non-Life Insurance Undertaking with its head office in Ireland.

The Undertaking is authorised to write Class 1, 2, 8, 9, 16 and 18 Non-Life Insurance under the EuropeanUnion (EU) Insurance and Reinsurance Regulations 2015.

The Undertaking's immediate parent company is MetLife EU and its ultimate parent company is MetLifeInc., a company domiciled in the USA. Refer to A.1.3 for details on the Group entity structure.

MetLife Inc. operates within Europe through various subsidiaries. The Undertaking leverages the optionsprovided by the European Insurance Directives to "passport" throughout the EU from a single base inIreland. The Undertaking has branches in Italy, Spain, Portugal, France, Slovakia, Czech Republic, andRomania. The Undertaking also operates via Freedom of Service (FOS) in Germany, Austria, Greece,Poland and the United Kingdom (UK). The Undertaking reinsures business from Russia.

The Undertaking's regulatory supervisor is the CBI, whose address is:

Central Bank of IrelandNew Wapping Street,North Wall Quay,Dublin 1

The Undertaking's external auditor is Mazars, whose address is:

MazarsChartered Accountants and Statutory Audit FirmHarcourt CentreBlock 3Harcourt RoadDublin 2

The auditors, Deloitte, Chartered Accountants, resigned from the office of auditor on 20 May 2019. Mazars,Chartered Accountants, were appointed as auditors of the Undertaking on 22 July 2019.

See section A.2 for a description of the Undertaking's underwriting performance by material lines ofbusiness and geographical areas.

A.1.2 Significant business and external events

The Undertaking is focused on the provision of involuntary loss of employment (ILOE) cover, mobilephone insurance (MPI) and travel insurance, as an add-on to MetLife Europe d.a.c.'s core life insuranceofferings. On 2 January 2019, the Undertaking launched its DTC business via FOS in Poland. TheUndertaking's DTC products offer predefined protection packages for accident and health insurancecover. MetLife Europe d.a.c. is an Irish incorporated entity authorised to write primarily life insurancebusiness in Europe.

On 6 December 2019, the Undertaking paid a dividend of €12.9m to MetLife EU. The directors weresatisfied that there was sufficient solvency cover, based on the ORSA, to support the payment of thedividend. In addition, there were sufficient IFRS distributable reserves based on the Companies Acts2014 requirements.

The impact of the COVID-19 virus is as a consequence of events that arose after the Undertaking'sreporting date of 31 December 2019, and therefore treated as a non-adjusting post balance sheet event.Since 31 December 2019, the COVID-19 virus has caused a pandemic, and governments and businesseshave taken measures such as travel bans, quarantines, and social distancing to combat the spread ofthe virus.  These have disrupted business activity, as well as causing economic slowdown and significantvolatility in financial markets. The Undertaking activated its business continuity plan with the majority ofstaff working from home, where possible. The Undertaking cannot determine or estimate the extent towhich these events have affected the Undertaking’s operations, business, financial results, or financialcondition. In general under Solvency II, EU insurance companies are required to hold sufficient eligibleown funds on an on-going basis to cover their Solvency Capital Requirement. The risk-based SolvencyCapital Requirement enables insurance undertakings to absorb significant losses and give confidenceto policyholders and beneficiaries that payments will be made as they fall due. Based on the results ofthe 31 December 2019 Solvency II valuation and of the 2019 Own Risk Solvency Assessment, andnotwithstanding the emergence of COVID-19 (as a non-adjusting post balance sheet event), there is noexpectation of non-compliance with the Minimum Capital Requirement or SCR over the planning horizon.The directors have considered the potential impact of COVID-19 on the Undertaking, and have concludedthat the Solvency II returns will continue to be prepared on a going concern basis.

During 2019, the Undertaking completed the transfer of certain finance and actuarial activities from Irelandto the existing Centre of Excellence in India and new Centres of Excellence in Poland and Malaysia.

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A.1.3 Entity structure

The Undertaking's immediate parent company is MetLife EU and its ultimate parent company is MetLifeInc. The Undertaking's parent is subject to group regulatory supervision by the CBI.

The Undertaking has authorised share capital of 100,000,000 shares of €1 each. At 31 December 2019,the Undertaking had issued €2,048,388 (2018: €2,048,388) in share capital. The qualifying holdings,number of shares and voting rights of the issued shares as at 31 December 2019 and as at 31 December2018 are:

Holdings SharesMetLife EU Holding Company Limited 100.00% 2,048,388

A.1.4 Total performance

Total performance Section 2019 2018reference €'000 €'000

OperatingUnderwriting result A2.1 9,880 9,808Investment income A3.1 307 339Other income A4.1 — 277Expenses A4.1 (6,575) (5,140)Tax A4.1 (599) (1,116)

Total operating 3,013 4,168

Non-operatingInvestment income A3.1 3 5Foreign exchange gain/(loss) A4.1 116 (72)Expenses A4.1 (689) (49)Tax A4.1 90 15

Total non-operating (480) (101)

Profit for the financial year 2,533 4,067

The financial values are per the Undertaking's IFRS financial statements.

Analysis is provided in the sections referenced above.

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A.2 Underwriting performance

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A.2.1 Underwriting performance by line of business

The table below sets out the analysis of 2019 underwriting performance against the prior year.

Miscellaneousfinancial loss Assistance

Healthinsurance Total

2019 2018 2019 2018 2019 2018 2019 2018€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000

Net earned premium 14,572 15,503 3,311 1,881 565 — 18,448 17,384Reinsurancecommission income 8,336 7,178 — — — — 8,336 7,178Total premium andcommission income 22,908 22,681 3,311 1,881 565 — 26,784 24,562

Claims incurred (1,151) (1,711) (56) (224) (14) — (1,221) (1,935)Change in technicalprovisions 138 1,322 21 35 (18) — 141 1,357Total policyholderbenefits (1,013) (389) (35) (189) (32) — (1,080) (578)

Commission (13,816) (13,235) (2,357) (1,336) (521) — (16,694) (14,571)Other variable expenses (612) (751) (11) — (1,002) — (1,625) (751)Total variableexpenses

(14,428) (13,986) (2,368) (1,336) (1,523) — (18,319) (15,322)

Deferred acquisitioncosts 1,773 1,146 — — 722 — 2,495 1,146

Underwriting result 9,240 9,452 908 356 (268) — 9,880 9,808

The underwriting profit remained consistent at €9.8m from 2018 to 2019.

The new FOS DTC Health business contributed to higher premiums and expenses in 2019. There wasa small loss on this business due start up direct marketing costs.

There was higher premium and related expenses in Portugal, Italy and Slovakia Assistance offset bylower premium in Romania and the run off FOS business. There was also higher commission income inItaly and Romania.

A.2.2 Underwriting performance by geographical segment

The Undertaking performance, split by material geographic performance is set out in the table below:

UK and Ireland Western Europe Central Europe Total2019 2018 2019 2018 2019 2018 2019 2018€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000

Premium andcommissionincome 3,685 3,567 17,312 15,484 5,787 5,511 26,784 24,562

Policyholderbenefits (342) (298) (427) (69) (311) (211) (1,080) (578)

Variableexpenses (2,603) (1,865) (13,212) (12,202) (2,504) (1,255) (18,319) (15,322)

Deferredacquisition costs 741 (44) 1,659 1,252 95 (62) 2,495 1,146

Underwritingresult 1,481 1,360 5,332 4,465 3,067 3,983 9,880 9,808

See the narrative analysis in section A.2.1 which sets out the main drivers of the movements in underwritingprofit in the branches.

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A.3 Investment Performance

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A.3.1 Investment return

2019 2018€'000 €'000

Operating investment income

Interest bearing securitiesNet interest income 338 400Investment management expenses (31) (61)

Total operating investment income 307 339

Non-operating investment income

Interest bearing securitiesRealised gains 3 5

Total non-operating investment income 3 5

Total investment return 310 344

Total investment return decreased by €34k from €0.34m in 2018 to €0.31m 2019. This is mainly drivenby a small decrease in realised gains in 2019 and lower interest income across the year arising fromholding lower duration and yielding assets in 2019 compared to 2018.

A.3.2 Gains/losses recognised directly in equity

2019 2018€'000 €'000

Investment gains/(losses) recognised directly in equity 416 (281)

The investment gains/(losses) reflect the accumulation of the movements from amortised cost to fairvalue on available for sale financial assets. These are disclosed in equity in the IFRS financial statements.

Investment gains have increased by €0.7m from €(0.28)m in 2018 to €0.42m in 2019. This is mainly dueto an increase in unrealised gains from bond holdings arising from decreased market yields.

A.3.3 Investments in securitisations

The Undertaking has no investments in securitisations.

A.4 Performance of other activities

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A.4.1 Other Income and Expenses

The other income and expenses of the Undertaking for the year are set out below:

2019 2018€'000 €'000

Performance of other activitiesOperatingOther income — 277Expenses (6,575) (5,140)Tax (599) (1,116)

Total operating (7,174) (5,979)

Non-operatingExpenses (689) (49)Foreign exchange gain/(loss) 116 (72)Tax 90 15

Total non-operating (483) (106)

Net results from other activities (7,657) (6,085)

Net costs from other activities have increased by €1.6m from €6.1m in 2018 to €7.7m in 2019.

The prior year other income relates to interest generated by a VAT refund in Spain.Operating expenses have increased mainly due to the new DTC FOS Health business set up costs.Non operating expenses have increased due to restructuring costs.

A.4.2 Leases

The Undertaking adopted IFRS 16 from 1 January 2019. The new standard capitalises leases for lesseesunder a single model, eliminating the distinction between operating and finance leases.

For Solvency II, this has resulted in the recognition of a new "right-of-use" asset and a correspondingliability representing the obligation to make lease payments on the Balance Sheet of €24k.

Expenses of €7k were incurred in the year in relation to the above leases.

A.5 Any other information

Intra-group transactions

Intra-group operations and transactions are mainly related to the Undertaking’s reinsurance andoperational arrangements.

All intra-group operations and transactions are at arm’s length as it would be if the operations andtransactions were with a third party.

A.5.1 Outstanding balances at year end

The Undertaking has intra-group balances with the following companies that are subsidiaries of its ultimateparent, MetLife Inc.:

2019 2018€'000 €'000

ALICO US 13,933 10,586MetLife Europe d.a.c. 1,228 104MetLife Europe Services Limited 123 (9)MetLife Greece 24 18MetLife Services Sp z.o.o (198) —MetLife Services EEIG (981) (1,538)

A.5.2 Material transactions during the year

On 6 December 2019, the Undertaking paid a dividend of €12.9m to its immediate parent, MetLife EU.

See note A.1.2 for further details.

A.5.3 Events after the year end

The impact of the COVID-19 virus is as a consequence of events that arose after the Undertaking'sreporting date of 31 December 2019, and therefore treated as a non-adjusting post balance sheet event.Since 31 December 2019, the COVID-19 virus has caused a pandemic, and governments and businesseshave taken measures such as travel bans, quarantines, and social distancing to combat the spread ofthe virus.  These have disrupted business activity, as well as causing economic slowdown and significantvolatility in financial markets. The Undertaking activated its business continuity plan with the majority ofstaff working from home, where possible. The Undertaking cannot determine or estimate the extent towhich these events have affected the Undertaking’s operations, business, financial results, or financialcondition. In general under Solvency II, EU insurance companies are required to hold sufficient eligibleown funds on an on-going basis to cover their Solvency Capital Requirement. The risk-based SolvencyCapital Requirement enables insurance undertakings to absorb significant losses and give confidenceto policyholders and beneficiaries that payments will be made as they fall due. Based on the results ofthe 31 December 2019 Solvency II valuation and of the 2019 Own Risk Solvency Assessment, andnotwithstanding the emergence of COVID-19 (as a non-adjusting post balance sheet event), there is noexpectation of non-compliance with the Minimum Capital Requirement or SCR over the planning horizon.The directors have considered the potential impact of COVID-19 on the Undertaking, and have concludedthat the Solvency II returns will continue to be prepared on a going concern basis.

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B System of governance

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B.1 General information on the system of governance

B.1.1 Governance structure

A consistent governance structure is in place across MetLife's European Economic Area (EEA) group ofentities, supporting clear decision making, roles and responsibilities. The Corporate Governance Manual(the "Manual") describes corporate governance within the Undertaking. The Manual ensures that thereis a common understanding of the following:

• key organs of the Undertaking (i.e. the Board of Directors (the Board), Executive Managementand the various committees) and their roles;

• the membership of the Board, its role, the frequency of meetings and the process for makingchanges to Board membership;

• the membership of each of the Undertaking’s committees, each committee’s role, thefrequency of meetings and how changes to membership are effected;

• who is empowered to act on behalf of the Undertaking and in what capacity and to whatextent; and

• how certain key individuals are appointed, resign or are removed.

The Manual also provides a central record of the current membership of the Board, the various committees,and a list of all Pre Approval Controlled Functions, i.e. roles for which CBI prior approval is required.

The governance structure defines the key areas of authority and responsibility and establishes theappropriate lines of reporting. The Undertaking is structured so as to achieve its objectives and to enableeffective risk management and to carry out its activities in a manner reflective of its size and requirements.

Figure: Undertaking's Corporate Governance Structure

The Corporate Governance Structure is supported by the Executive Management organisationalstructure, which defines key areas of authority and responsibility and establishes the appropriate linesof reporting. The Executive Management is responsible for the day to day running of the Undertakingand is led by the Chief Executive Officer (CEO).

In Ireland, there is an established fitness and probity regime and the list of ‘key functions’ is naturally andconclusively defined by all those who are subject to fit and proper requirements under the CBI's guidance.The list of those persons is detailed within section B.2. The following chart indicates the positions of keyfunction holders within the Executive Management team and and their reporting lines.

Figure: Executive Management Organisational Structure as at 31/12/2019

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B.1.2 Role of the Board

The Board directs the Undertaking's affairs to ensure its prosperity, whilst meeting the appropriate interestsof its shareholders and third parties, such as customers and regulators. In particular, the Board provideseffective, prudent and ethical oversight of the Undertaking.

The Board is responsible for, among other things, where relevant, reviewing and/or setting and overseeing:• the business strategy;• the amounts, types and distribution of capital adequate to cover the risks of the Undertaking;• the strategy for the on-going management of material risks;• a robust and transparent organisational structure with effective communication and reporting

channels;• a remuneration framework that is in line with the risk strategy of the Undertaking; and• an adequate and effective internal control framework, that includes well-functioning risk

management, compliance and internal audit functions as well as an appropriate financial reportingand accounting framework.

The Board focuses on the following key areas:

Vision and values• Guide and set the pace for the Undertaking's current operations and future development.• Promote appropriate values throughout the Undertaking (e.g. values on compliance through the

compliance statement).• Determine policies and ensure they are consistent with, and promote the vision and values, of the

Undertaking.

Strategy and structure• Review present and future opportunities, threats and risks in the external environment and strengths,

weaknesses and risks relating to the Undertaking.• Review strategic options, decide on those to be pursued and the means to implement and support

them.• Determine and review the Undertaking's goals.• Ensure that the Undertaking's organisational structure and capability are appropriate for implementing

the chosen strategies and manage risk and compliance effectively in the Undertaking.• Ensure that risk and compliance are managed effectively throughout the Undertaking.• Oversee remuneration practices and shall ensure that the Undertaking has remuneration policies and

practices that are consistent with and promote sound and effective risk management.

Delegation to managementThe Board delegates certain matters by board resolution, by terms of reference for committees of theBoard or by power of attorney to specific individuals to act on behalf of the Board in respect of certainmatters. Where the Board delegates authority it shall monitor the exercise of this delegated authority.The Board cannot abrogate its responsibility for delegated authority.

Meetings of the Board, Board working sessions and Board training sessionsThe Board meets at least four times per calendar year and at least once in every six month period.

All directors attend Board meetings in person unless they are unable to do so due to circumstancesbeyond their control (e.g. illness). However, where physical presence is not possible, directors may attendby teleconference or video-conference. In the event of the absence of the Chair, an independent non-executive director chairs Board meetings.

Board working sessions and Board training sessions are scheduled regularly to discuss keydevelopments, projects and initiatives. The aim of these sessions is to provide the Board with theopportunity to explore, at an early stage, topics which will be presented at a future Board meeting forconsideration.

All Board meetings are arranged through the Company Secretary and the Chair. Minuting of all Boardmeetings follow the Board/Committee minute review process in line with the Manual.

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B.1.3 Role of Directors

The role of the independent non-executive directorAs an integral component of the Board, independent non-executive directors represent a key layer ofoversight. It is essential for independent non-executive directors to bring an independent viewpoint tothe deliberations of the Board that is objective and independent of the activities of the executives.

The role of the executive directorThe role of the executive director includes to propose strategies to the Board and, following Board scrutiny,to execute the agreed strategies to the highest possible standards.

Responsibilities of all directors All directors are responsible for the following:

• ensuring that there is an effective executive team in place;• participating actively in constructively challenging and developing strategies proposed by the

executive team;• participating actively in the Board’s decision making process;• participating actively in committees of the Board; and• exercising appropriate oversight over execution by the executive team of the agreed strategies,

goals and objectives and to monitor reporting of performance.

B.1.4 Matters reserved for the Board

Strategy and Management• Responsibility for overseeing the management of the Undertaking.• Approval of the Undertaking’s long term objectives and business strategy; and review of

performance in light of strategy.• Approval of all relevant Undertaking policies and MetLife Group policies where they apply to the

Undertaking.• Decisions to extend the Undertaking’s activities into new business or geographic areas.• Decisions to cease to operate all or any material part of the Undertaking’s business.• Decisions to vary the Undertaking’s strategy for meeting the policyholder liabilities.

Structure and Capital• Reviewing and approving the Undertaking’s financial plans.• Approval of changes relating to the Undertaking’s capital structure, including share issues,

reduction in capital, loan capital and gifts of capital.

Financial Reporting and Controls• Approval of the annual report and accounts.• Approval of the annual regulatory return to the CBI.• Approval of significant changes in accounting policies and practices.• Approval of dividends.• Approval of the external auditor’s fees.

Internal Controls• Responsibility for setting and overseeing the establishment of an adequate and effective internal

control and risk management systems, including approval of the internal audit plan.• Receiving reports from the audit and risk committees on, and reviewing effectiveness of, the

Undertaking’s risk and control processes.• Approval of the Risk Management Framework.• Approval of the ORSA Process.

Non-insurance Contracts• Approval of capital projects.• Approval of acquisitions, mergers or disposals.• Approval of material contracts by nature or amount entered into by the Undertaking in the ordinary

course of business (e.g., acquisitions or disposals of fixed assets). Note: Material includes, butis not limited to, consideration over €7,500,000 (or €5,000,000 net of reinsurance, per matter).

• Approval of new bank borrowing facilities.

Board Membership and other Appointments• Other than where the shareholder exercises the right, appointment and removal of directors.• Approval of changes to Board structure, size and composition.• Appointment and removal of the Chair.• Appointment and removal of the Company Secretary.• Appointment, reappointment and removal of the external auditor.• Appointment and removal of Chair and members of committees of the Board.• Appointment and removal from office of the CEO or the Head of a Controlled Function.

Remuneration• Review the remuneration structure for employees of the Undertaking in line with the risk strategies

of the Undertaking.

Delegation of Authority• Maintain oversight of all committees of the Board including approval of the terms of reference.• Review information from committees of the Board on their activities.• Approval of Undertaking’s authorised signatories.• Authorising individuals to grant powers of attorney.

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Corporate Governance• Review and approval of the Undertaking’s overall corporate governance arrangements.• Consider balance of interests between shareholders, employees and customers.• Undertake a formal annual review of its own performance, that of its committees and that of

individual directors.

Compliance • Approval of the compliance monitoring programme.• Responsibility for review and monitoring of Treating Customers Fairly (TCF) across the business.

Other• Approval and settlement of material litigation matters.• Approval of schedule of matters reserved to the Board.• Any decision likely to have a material impact on the Undertaking from any perspective, including,

but not limited to, financial, operational, strategic or reputational.

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B.1.5 Role of CEO

The Board appoints a CEO.

The CEO is the most senior executive officer and has ultimate executive responsibility for the Undertaking'soperations, compliance and performance. The CEO is a director of the Undertaking. The CEO is the mainlink between the executive and the Board. The CEO has certain authorities delegated to him by the Board.

In conjunction with the Chair of the Board, the CEO is responsible for agreeing the remuneration of theindependent non-executive directors.

The Executive Management is responsible for the day to day running of the Undertaking and is led bythe CEO.

B.1.6 Board committee structure

The purpose of a committee of the Board is to provide more detailed oversight of particular areas of theUndertaking’s activities.

The Board has oversight of all committees of the Board and ensures and documents that all membersof any committees of the Board have the necessary skills, knowledge, expertise and time to fulfil thatrole. Minutes of all committees of the Board are distributed to the Board either at a Board meeting or viaBoard Vantage. The Board documents and provides any necessary training to those members to ensurethey have, and maintain, the necessary skills and experience.

The current committees of the Board are:• Audit Committee; and• Risk Committee.

The Audit CommitteeThe purpose of the Audit Committee (AC) is to assist the Board in fulfilling its statutory and fiduciaryresponsibilities relating to the external reporting of financial information, internal controls and theindependence and effectiveness of internal and external audit.

The role of the AC, its membership, frequency of meetings and reporting requirements are set out in theTerms of Reference of the AC as approved by the Board.

The Board Risk CommitteeThe Board Risk Committee (BRC) is responsible for oversight and advice to the Board on the currentrisk exposures of the Undertaking and its future risk strategy. The BRC advises and makesrecommendations to the Board on the following:

• risk appetite and tolerance for future strategy (taking into account the Board’s overall risk appetite,the current financial position of the Undertaking and, drawing on the work of the AC and theexternal auditor, the capacity of the Undertaking to manage and control risks within the agreedstrategy);

• the system and programme of risk management with the aim of identifying, measuring, controllingand reporting risks;

• the alignment of strategy with the Board’s risk appetite; and• promoting and embedding a risk awareness culture within the Undertaking.

The BRC also oversees the risk management function.

The role of the BRC, its membership, frequency of meetings and reporting requirements are set out inthe Terms of Reference of the BRC as approved by the Board.

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B.1.7 Main roles and responsibilities of key functions

This section details the roles and responsibilities of the Chief Investment Officer and the four mandatory'key functions' of Internal Audit, Compliance, Risk Management and the Actuarial function.

The role of the Chief Investment OfficerThe following duties and responsibilities are delegated to the Chief Investment Officer of the Undertakingby the Board:

• assist the Board in fulfilling its statutory and fiduciary responsibilities relating to the oversight ofinvestment management for the Undertaking;

• formulate and recommend to the Board for its approval the strategic investment policy of theUndertaking;

• approve Asset Liability Management (ALM) / Investment Guidelines and inform the Board of anychanges;

• receive and review quarterly performance and position reports and raise with the Board anymaterial issues arising;

• monitor investment portfolio asset holdings to ensure compliance with the ALM / investment andregulatory guidelines;

• approve appointments and terminations of investment managers and advisors and approve anyinvestment management agreements;

• monitor and review the performance of investment managers and advisors; • approve limits for seed capital on external funds;• approve list of counter parties and credit institutions for investment; and• approve investment asset classes available for investment.

The role of Head of Internal Audit The Head of Internal Audit reports to the Chair of the AC. The Head of Internal Audit is responsible for:

• leading the performance of all audit activities across the Undertaking;• providing input and challenge to management regarding the effectiveness of risk management

and internal control processes across the Undertaking;• evaluating the design and operating effectiveness of the Undertaking’s policies and processes;• performing consulting and advisory services related to governance, risk management and control

processes;• developing, presenting and executing appropriate risk-based audit plans in accordance with

MetLife’s global audit methodology, including presenting quarterly plans for review and approvalby the AC;

• providing timely reports to the AC regarding the outputs of planned audit activities, includingprogress against agreed management action plans;

• attending, presenting at, and issuing reports to the appropriate governing bodies, including theAC, the BRC and other committees as appropriate;

• providing the AC and the broader management team with an understanding of Internal Audit’smethodology and approach;

• ensuring that the Internal Audit team is appropriately resourced in terms of skills and experienceto undertake planned audit activities;

• assisting the AC in meeting its fiduciary responsibilities;• maintaining open, constructive and cooperative working relationships with regulators, including

the CBI; and• developing and maintaining an effective working relationship with the external auditors.

The role of Head of ComplianceThe Head of Compliance is a member of the Undertaking’s Executive Management and reports to theCEO. The Head of Compliance is the executive officer with primary responsibility for ensuring that theUndertaking remains compliant with applicable laws, requirements and regulations and with theUndertaking’s Compliance Policies, Procedures and Programmes.

The role of Chief Risk Officer (CRO)The CRO is a member of the Undertaking’s Executive Management and reports to the CEO. The CROis a director of the Undertaking. The CRO’s primary responsibility is to the Board. The CRO reports tothe Board periodically and has direct access to the Chair. The CRO reports to the BRC on a regularbasis. The CRO chairs the Executive Risk Committee.

The CRO is the senior executive officer with responsibility for the risk management function and formaintaining and monitoring the effectiveness of the Undertaking’s risk management system.

The role of the Head of Actuarial FunctionThe Head of Actuarial Function is a member of the Undertaking’s Executive Management and reports tothe Chief Finance Officer (CFO). The role relates to the delivery of actuarial services to the Undertakingand comprises responsibilities for general management input to the Undertaking, administration of theactuarial function, and statutory duties set out in legislation (subject also to regulation and professionalguidance).

Actuarial services includes but is not limited to the determination of technical provisions (for all accountingbases) and required capital, and the provision of advice in relation to capital management, underwriting,reinsurance and investment.

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B.1.8 Material changes

Over the reporting period, there were no material changes to the system of governance of the Undertaking.

B.1.9 Remuneration

The Undertaking adopts the remuneration policy and practices determined by MetLife Inc. TheUndertaking's Board is responsible for ensuring that in adopting the policy that it is in line with the riskstrategies of the Undertaking and that it is consistent with and promotes sound and effective riskmanagement. The Undertaking’s Board provides oversight of the remuneration policy and practices andensures that these do not promote excessive risk taking. 

Remuneration PolicyMetLife’s compensation program is designed to:

• provide competitive total compensation opportunities that will attract, retain and motivate high-performing employees;

• align compensation plans with its short-term and long-term business strategies;• align the financial interests of the executives with those of its shareholders through stock-based

incentives and stock ownership requirements; and • reinforce the pay for performance culture by making a meaningful portion of total compensation

variable, and differentiating awards based on company and individual performance.

MetLife uses a competitive total compensation structure that consists of base salary, annual incentiveawards and stock-based long-term incentive award opportunities.

Variable remuneration for eligible MetLife associates is determined by a combination of grade/seniority,individual performance and Group performance. There are appropriate measures in place to promoteprudent and effective risk management and avoid promoting excessive risk taking.

The Undertaking does not provide supplementary pension schemes (i.e. superior conditions for someindividuals) or early retirement schemes for members of the Board or other key function holders.

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B.1.10 Material transactions with related parties

Material transactions with shareholders

On 6 December 2019, the Undertaking paid a dividend of €12.9m to its immediate parent, MetLife EU.

Other intra group balances and transactions are set out in sections A.5.1.

Material transactions with persons who exercise a significant influence on the UndertakingThere were no material transactions with any persons who exercise a significant influence on theUndertaking over the reporting period.

Material transactions with members of the BoardThere were no material transactions with members of the Board over the reporting period.

B.1.11 Adequacy of system of governance

The Executive Management and the Board regularly review the adequacy of the system of governanceas a whole and in selected areas, to confirm it remains adequate for the Undertaking’s needs, and toprioritise areas of improvement. There were no major changes required to the system of governanceduring 2019 as a result of these reviews.

B.2 Fit and proper requirements

B.2.1 Fit and proper policy

The Undertaking's Fitness and Probity Policy (the Policy) sets out the minimum standards, in compliancewith the CBI Fitness and Probity Standards and relevant legislation. It is there to ensure that a person,who is known as a 'Responsible Person', has the necessary qualities and competencies in order to allowhim/her to perform the duties and carry out the responsibilities of his/her position within the Undertaking.The qualities and competencies relate to the integrity demonstrated by a Responsible Person in personalbehaviour and business conduct, soundness of judgement, a sufficient degree of knowledge andexperience and appropriate professional qualifications.

Compliance with the Policy is mandatory for the Undertaking and its branches. Specifically, the Policysets out and describes the approach for assessing and monitoring individuals’ fitness and probity.

Definitions• Pre-Approval Controlled Functions (PCFs): The specific Controlled Functions (CFs) are set out

in Schedule 2 of the Regulations. Persons appointed to a PCF must be approved in writing bythe CBI, prior to their appointment.

• CFs: Specific functions as set out in the Regulations. Persons performing these functions includethe persons who exercise a significant influence in the affairs of the Undertaking, monitorcompliance or perform functions in a customer facing role. In determining whether an individualis performing a CF, the Undertaking assesses the role and responsibilities of the person in linewith the relevant regulatory requirements.

• Regulations: Central Bank Reform Act 2010 (Sections 20 and 22) Regulations 2011 as amended.• Responsible Person: Any person performing one or more CF role.

Assessment of fit and proper The Undertaking does not permit a person to perform a CF unless it is satisfied on reasonable groundsthat the person complies with the standards described below and has obtained confirmation from theperson that he/she agrees to abide by the standards.

The standards provide that a Responsible Person must be: • Competent and capable;• Honest, ethical and act with integrity; and• Financially sound.

The Undertaking has in place appropriate procedures to maintain a register of all Responsible Persons(the Register) and a record of all due diligence undertaken in respect of such Responsible Persons.

Notification is made to the CBI (to the extent required) following any change to the Register arising eitherfrom the appointment, resignation, retirement, removal or material change in the responsibilities of aResponsible Person’s role.

The notification to the CBI is carried out by Compliance following a review of the fit and proper assessmentand completion of an individual questionnaire, if required based upon the event in question.

Fitness criteriaIn determining a Responsible Person’s competence and capability for performing their role, assessmentsmay include, but will not be limited to:

• Whether the person satisfies the relevant training and competence requirements, which may besatisfied by evidence of qualifications (e.g. diplomas, degrees and professional memberships)and capability appropriate to the corresponding position description.

• Whether the person has demonstrated by experience that they are able, or can reasonably beexpected to be able, to perform the intended function. Employment and reference checks maybe used to establish such ability.

Probity criteriaIn determining a Responsible Person’s honesty, integrity and reputation for performing his/her role, thefollowing factors may be considered, among others:

• Has the person been convicted of any criminal offence, whether or not presently of record;(particularly relevant being any offence involving dishonesty, fraud, financial crime or otheroffences under legislation relating to companies, building societies, industrial and providentsocieties, credit unions, friendly societies, banking and or other financial services, insolvency,consumer credit companies, insurance, and consumer protection, money laundering, marketmanipulation or insider dealing)?

• Has the person had any adverse finding against him/her or settlement in civil proceedings,particularly in connection with investment or other financial business, misconduct, fraud or theformation or management of a body corporate?

• Has the person had personal involvement in any investigation or disciplinary proceeding resultingin sanction or adverse finding with any requirements or standards of any supervisory bodies/regulatory authorities, clearing houses and exchanges, professional bodies, or governmentbodies or agencies?

• Has the person been involved as a Responsible Person with a company, partnership or otherorganisation that has been refused registration, authorisation, membership or a licence to carryout a trade, business or profession, or has had that registration, authorisation, membership orlicence revoked, withdrawn or terminated, or has been expelled by the CBI or government bodyor agency?

• Has the person been refused the right to carry on a trade, business or profession requiring alicence, registration or other authority as a result of the removal of the relevant licence orregistration?

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• Has the person served as a director, partner, or chief executive of a business that has gone intoinsolvency, liquidation or administration while personally connected with that organisation orwithin one year after that connection?

• Has the person been investigated, disciplined, censured, suspended or criticised by a supervisorybody/regulatory authority, professional body, government body or agency, a court or tribunal,whether publicly or privately, with which such Responsible Person has been involved?

• Has the person been dismissed or resigned, upon request, from employment or from a positionof trust, fiduciary appointment or similar capacity while holding a position as a ResponsiblePerson?

The aforementioned criterion will be considered in relation to a person’s ability to perform the relevantCF. In addition, checks to ensure compliance with laws and regulations must include appropriate legalreview.

Frequency of AssessmentA person proposed to perform a CF will be assessed prior to appointment and before any contract issigned.

All Responsible Persons will be reassessed on an annual basis as set out in the Undertaking's HumanResources (HR) procedure documents and in accordance with the relevant legislation. Notwithstandingthe above, if a Responsible Person becomes aware of a material change in his/her circumstances thatcould affect his/her fit and proper assessment, he/she is required to notify the Head of HR without delay.

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B.3 Risk management system including the Own Risk and SolvencyAssessment (ORSA)

B.3.1 Risk management structure

The Risk Management Framework (the Framework) sets out the approaches to risk management andstructure to be followed by all associates in their capacity as executives, management and staff.

The key objectives of the Framework are to:

• Promote a strong risk culture in the Undertaking, rooted in the Undertaking’s purpose and values,in particular customer protection;

• Ensure consistent, systematic management of risks across all businesses, operations and risktypes; and

• Enable decision makers to direct the Undertaking’s resources to attractive business opportunitiesthat are within the Board’s risk appetite.

Scope and applicationAll business activity and decisions are made in the context of, and in compliance with, the Framework,which should also be read in the context of the Undertaking’s Risk Strategy and Appetite and associatedpolicies. Every associate is sufficiently familiar with the Framework as is relevant to their role, and exercisessound judgement to act within the Framework in their daily work. It is the responsibility of managementto ensure that they have the capability, resources and knowledge to operate within this Framework andexercise their duties under it.

Risk governanceIn its mandate to support MetLife Group's strategy in Europe, the Undertaking is active in diversesegments, markets and products. Decisions are made and implemented across borders; and businessenvironments are the result of, for instance, different histories as the Undertaking has integrated otherentities. The Framework is designed to facilitate, on an on-going basis, the systematic management ofrisks consistent with this specific situation, by integrating risk management into business practices anddecision mechanisms at the appropriate levels of the Undertaking.

Figure: The Elements of the Undertaking’s Risk Management Framework

The Board owns the Undertaking’s Risk Appetite and Strategy. In defining this, consideration is given tothe existing and potential opportunities to develop and grow the business, and the Undertaking’s capacityto absorb losses. In addition, as part of MetLife Group, the Undertaking’s risk appetite takes strategicdirection from MetLife’s ‘Enterprise Risk Appetite’, as defined by the MetLife Inc. board, and cannot gobeyond it in any dimension.

The Undertaking adopts the ‘three lines of defence’ governance model to ensure that the overall riskprofile of the Undertaking remains within the risk appetite as mandated by the Board. The Undertaking’s“three lines of defence” have independent reporting lines into the Board, and provide the Board with theassurance of strong governance and controls for every decision that impacts the risks the Undertakingfaces.

The first line of defenceThe managers of all business and operations areas, as the first line of defence, are responsible as riskowners for ensuring that all risks in their respective areas and any relevant interfaces with other areasare justified by business goals, and that all risks are appropriately managed and controlled within theFramework. In particular, it is the responsibility of the relevant department manager to identify, measure,manage, monitor and report all risks in an area according to the Framework and the Risk Appetite andStrategy.

The Finance Function is key to risk measurement. It measures and monitors financial valuations, flowsand projections; ensures appropriate accounting procedures and authorities; and regularly reports to theBoard. The Head of Actuarial Function regularly reports independently on valuation assumptions anduncertainties.

The second line of defenceThe Risk Management, Compliance and IT Risk and Security Functions fulfil the second line of defence,advised by the Legal Function, by providing the enterprise-wide, comprehensive and consistent systems,techniques and processes to aggregate, assess and limit the risks the Undertaking faces across different

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areas. In particular, the Risk Function utilises risk quantification models such as Economic Capital,recommends risk appetite and limits, and provides support in the management of key risks.

The third line of defenceInternal Audit provides independent assurance over the strengths of controls as the third line of defence.Internal Audit examines and evaluates the adequacy and effectiveness of controls with a risk-based focus,and performs special reviews and investigations as directed by the Audit Committee and ExecutiveManagement.

Dialogue, escalation and resolutionA number of interacting committees provide the structure for the dialogue regarding risk exposures. Thisincludes escalation of risks that cannot be managed within a confined area of the organisation andresolution of conflicts between different decision makers, in particular where questions of risk appetiteare concerned.

At an executive level, the Undertaking has established the following Committees: the ExecutiveManagement Committee (EMC), the Executive Risk Committee (ERC) and the Product ManagementCommittee (PMC); and in each branch, there is a Branch Executive Committee (BEC) and a Risk, Auditand Compliance Committee (RACC). There are also RACCs specifically for the FOS Business (FOSRACC) and the Head Office functions (HO RACC).

Executive Risk Committee (ERC)The ERC reports regularly to the BRC, and is chaired by the CRO. The ERC monitors and reports to theBRC the current overall risk profile, key risks and risk metrics, including the solvency position of theUndertaking, and its dynamics, against the Board’s stated risk appetite. It steers the operation of the RiskManagement Framework and monitors, reviews and makes recommendations to management relatingto risk issues facing the Undertaking. The ERC also makes recommendations to the BRC regarding riskappetite, policies etc. and also sets technical limits in line with the approved risk appetite.

Risk, Audit and Compliance Committees (RACCs)RACCs report into the ERC and are established for each branch, the FOS business, and the HO functions,to review and approve the identification and assessment of all risks, losses, issues and near misseswithin its remit; approve the relevant controls and action plans, for existing and new businesses, productand distribution arrangements; and to provide general oversight to risk management within its area. TheRACCs also monitor and review the metrics assigned to them for monitoring by the ERC. RACC meetingsare scheduled to ensure timely information flow between the RACCs and the ERC.

One of the branch/FOS RACCs’ primary responsibilities is to identify, monitor, assess and manageOperational and Conduct Risks, where the RACC ensures that these can be suitably integrated into theUndertaking-wide risk management programme. For Insurance Risks, Credit Risk, Market/ALM Risksand Liquidity Risk, the branch RACC supports the identification and monitoring in particular of exposureslinked to products and distribution arrangements.

The branch general managers have a leading role in each RACC (and the Head of Operations in the HORACC) in ensuring high-quality meetings through their example and authority. The RACC should bechaired by a person nominated by the CRO.

Other Committees

Reserving CommitteeThe Reserving Committee is a sub-committee of the Audit Committee and reviews the basis of SolvencyII reserving, including assumptions and methodology. The CRO chairs the Reserving Committee.

Product Management Committee (PMC)The PMC assists the executive function of the Undertaking in relation to the creation and ongoing reviewof the Undertaking’s products and reinsurance programmes. While not a ‘Risk’ committee, the PMC playsan important ‘first-line’ role in the approval of products, oversight and governance of the suite of products

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and the management of product related risks, in particular insurance risk but also credit and market risksoriginating from product features.

The CRO is a member of the PMC.

Reinsurance CommitteeThe Reinsurance Committee is a sub-committee of the PMC. The purpose of the Reinsurance Committeeis to maintain oversight of the Undertaking's reinsurance operations and to assist the PMC in relation toany reinsurance arrangements to be entered into (including any amendments) or terminated by, or onbehalf of, the Undertaking.

Executive Management Committee (EMC)The CRO is a member of the Undertaking’s EMC, where the Undertaking’s strategic direction is decided,and its implementation is monitored.

Branch Executive Committee (BEC)Each branch has a BEC which is chaired by the branch general manager, and together with the RACCforms part of the primary governance structure for each branch. Other working or steering groups maybe established, however these should be concentrated on operational matters, with key decisions interms of governance being referred to the BEC and RACC, as appropriate.

The branch risk manager is a member of and/or attends the BEC, which is responsible for ensuring thatthe branch establishes and maintains such systems and controls as are appropriate to its business. Inparticular, the BEC, together with the RACC, ensures the effective implementation of risk and compliancemanagement within the branch. Under specific circumstances, the CRO can temporarily approve analternative branch executive to represent risk management in the BEC.

Risk Management FunctionThe Risk Function operates an enterprise-wide, comprehensive system to identify, aggregate, measureand report risks across the Undertaking, and assesses how the full range of risks and their interactionimpact the Undertaking’s aggregate solvency, liquidity, earnings, business, customers and reputation.

The Risk Function leverages MetLife’s Group Risk Management Function for the challenge and support,and escalates risks and issues as required.

Activities of the Risk FunctionThe Risk Function carries out the following key activities:

• Risk Monitoring and Analytics.• Risk Governance and Reporting.• Embedding of the Risk Management Framework in the business units (branches and FOS

business).• Operational risk management processes, e.g. management of the risk register.• Leading the ORSA process, analysis and reporting.

Risk policies and methodologiesThe Board approves policies and other documents providing binding direction and guidance used in theUndertaking to regulate risk exposures. All business activity and decisions in which an element of risk ispresent must be taken in the context of, and in compliance with, the Risk Strategy and Appetite documentand such further policies.

It is the responsibility of all relevant individuals to be familiar with the contents of the policies, whereappropriate, and to exercise sound judgement to act within the policies in their daily work.

The policies are to be adhered to in all circumstances. Implementation of the policies and monitoring ofongoing compliance is primarily the responsibility of the Heads of Function and is overseen by the relevantcommittee. In particular, policy breaches should be reported to the ERC, and as appropriate to the BRCand Board.

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Risk Management policies are developed where necessary to regulate the management of specific risksand provide a consistent Framework for the management of risk in line with Risk Strategy and Appetite,and should be read and reviewed in the context of Risk Strategy and Appetite. They establish minimumstandards, allocate responsibilities to ensure that these standards are upheld, and articulate theUndertaking's approach to risk management for a risk type, the key risk management processes, detailedlimits, the governance approach, and reporting requirements.

The Board reviews the risk policies at least annually, amending them to reflect current best practice andchanges in regulatory requirements. In the annual review process, each policy is reviewed with and bythe Undertaking, with the appropriate challenge from the Risk Function. Any material change is noteffective until approved by the Board either directly or via the BRC.

Following approval, the Risk Function circulates the Risk policies and communicates changes with thebusiness. The Risk Function intranet page is a central location from which all Business Functions, includingbranches, can access the Risk policies. Approved policies are presented to the RACCs for noting andimplementation. On a quarterly basis, the RACCs monitor and challenge the implementation of appropriateRisk policies within the Undertaking to ensure ongoing compliance.

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B.3.2 Risk strategy and appetite

The Undertaking’s risk appetite is set in the context of both its overall business objectives and its riskstrategy. The Undertaking takes certain financial and insurance risks as a strategic objective, but as aconsequence of its activities is also exposed to operational and other risks. The Board is responsible forthe Undertaking’s overall risk profile, and in particular sets the risk appetite.

The Risk Appetite is operationalised through quantitative limits set out in the appendices of the RiskStrategy and Appetite policy. These limits define both the medium-term risk appetite, and the range forpermissible deviations over the short term. Further risk limits and guidelines on how to comply with riskappetite in each class are set out in the respective individual risk policies (Credit, Market, Liquidity,Insurance and Operational).

Management is responsible for defining the metrics in line with the business and the risk appetite set outin the Risk Strategy and Appetite. The ERC is responsible for approving any changes in the metrics thatare proposed in between scheduled reviews. Any such approved changes are notified to the BRC andthe Board. Additional limits can be set by agreement between the respective risk owners and the CRO.

Risk management strategies by category of riskThe material risks to which the Undertaking are exposed are insurance risk, credit risk, market risk,liquidity risk, operational and business risk and strategic risk.

Credit riskThe Undertaking is exposed to credit risk, i.e.:

• Another party’s failure to perform its financial obligations to the Undertaking, including failureto perform them in a timely manner (default risk);

• Increasing doubts over another party’s ability to meet its financial obligations (migration risk);or

• Increases in the discounts markets apply to the value of obligations with default risk (spreadrisk).

Credit risk of the Undertaking’s cash deposits and general-account investments is managed by theUndertaking’s Treasury and Investment Functions, and overseen by the Board. The credit risk of othercounterparties, such as distributors, large clients etc. is the responsibility of the respective business unitand where material to the Undertaking's risk profile is overseen by the appropriate Risk Committee onan exception basis.

Market riskThe Undertaking is exposed to market risk, including interest rates due to timing differences of asset andliability cash flows, and basis differences between valuation rates, different currencies and credit spreads.

Market risks are primarily mitigated through duration targets specified in the Investment Guidelines.Exposure to changes in credit spreads is mitigated by investing in a diversified and high-quality investmentportfolio. The Chief Investment Officer and PMC oversee the management of the Undertaking's marketrisks.

Liquidity riskThe Undertaking is exposed to liquidity risks where it is obliged to settle liabilities at short notice, and isunable to liquidate assets or only with very significant haircuts. Given the nature of its business, thereare only very few areas in which liquidity risk can arise. These risks are mitigated by investing in adiversified, high-quality, liquid investment portfolio and a strong forecasting process. This processidentifies liquidity needs in both stressed and non-stressed market conditions.

Liquidity risk management is managed by Treasury and overseen by the Board.

Insurance riskThe Undertaking is exposed to unanticipated fluctuations in the timing, frequency and severity of insuredevents relative to expectations, arising, for instance, from premium and reserve risk.

These are identified and assessed as part of the product development process, in which appropriateunderwriting, sales and administrative conditions are defined for all risks associated with the insurancepolicies over their whole life cycle.

The business units develop insurance products and underwrite risks in line with approved standards.Each insurance class needs to be approved by the Board prior to any business being underwritten. TheBoard can delegate its authority to approve products to management if they do not have the potential tochange the Undertaking’s risk profile materially. The Undertaking’s aggregate insurance risk is overseenby the PMC.

Operational and business riskOperational risk arises from unexpected loss due to inadequate or failed internal processes, people andsystems, or from external events (including legal risk). Specifically, conduct risk relates to losses, typicallyfrom supervisory intervention, caused by misconduct in the insurance market, such as mis-selling orproduct design that is unsuitable for the intended client.

Business risk is the possibility a company will have lower than anticipated profits, influenced by numerousfactors, including sales volume, lapses, sales and maintenance costs, competition and achievablemargins.

Operational and business risk is intricately tied to the overall management of a business and is thereforethe responsibility of each business unit. Operational risk also arises in the Undertaking’s HO functions,such as Finance, Actuarial, etc. Each function is responsible for the management of operational risk intheir respective area. The Risk Management Function provide oversight as part of the Enterprise RiskSelf Assessment (ERSA) process.

Strategy Risk Strategy Risk is defined as failure of elements of a chosen strategy, leading to financial loss or foregoneexpected profits. A particular aspect of Strategy Risk is a withdrawal of capital and liquidity sources thatthe Undertaking relies upon in the execution of its strategy.

Strategy risk is primarily owned in each business unit, and the Undertaking’s Executive Team owns therisk of the Undertaking’s overall strategy.

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B.3.3 ORSA

ORSA ProcessThe ORSA is a bespoke strategic analysis which links together all pillars of Solvency II and all areas ofthe the Undertaking. It enables the Board to understand the risks faced, and how they translate intocapital needs or alternatively require mitigation actions.

The ORSA process is an ongoing and continuous process, of which the annual report is a completeboard-level roundup at a point in time providing a meaningful and useful report to the Board. The resultsof the ORSA process and the insights gained in the process provide input into risk management, long-term capital management, business planning and product development and design and allow theUndertaking to:

• Assess the link between the Undertaking’s Risk Management Framework, business plan, riskprofile, and capital planning, including dividend payments.

• Understand the level at which the Risk Management Framework influences the decision makingprocess.

• Establish the ORSA as a tool that allows the identification, measurement, management,monitoring and reporting of risk, which is embedded in the Undertaking’s management processes,under the direction of the Board.

• Provide insight into the development of the balance sheet and the drivers of volatility.• Confirm appropriate risk appetite limits, including the normal operating range for capital; • Inform commercial decisions and assess key projects and solutions to meet customer needs.• Describe the approach by which the Undertaking meets all relevant regulatory requirements in

relation to stress testing and scenario analysis.• Assess the Undertaking's overall solvency needs prospectively, providing analysis of the

Undertaking's ability to remain a going concern.• Monitor compliance with regulatory capital requirements on a continuous basis, allowing for

changes in risk profile and stressed conditions, and the quality and loss absorbing capacity ofown funds.

• Produce results that are integrated into long term capital planning, own funds allocation, businessplanning, product development and design, and governance.

• Describe the approach by which the Undertaking incorporates all key results and findings fromstress testing and scenario analysis into the capital management and planning approach andbusiness decision making approaches.

The ORSA process is significantly dependent on the key interactions between the processes (i.e. businessplanning and stress testing) in order to obtain the results which provide senior management and theBoard with comfort that there are adequate solvency levels, i.e. the regulatory capital requirements areachieved and within the risk tolerance limits.

The Board are heavily engaged with the ORSA process at all stages. Key stages of the Board’s involvementin the ORSA process are as follows:

• Early in the year, the Board reviews the ORSA Board engagement plan for the year and agreesthe stress and scenario tests;

• Over the course of several meetings during the year, the Board reviews the overall solvencyneeds output, including information on the risk profile, the draft solvency projections, theassessment of the appropriateness of the standard formula and the own view of capital. Duringthese sessions, the Board engages in active challenge of the results, which may includerequesting further analysis, stress tests and scenarios, investigation of management actions orspecific information to be added to the ORSA report;

• Towards the end of the year, the Board reviews the final ORSA report for approval. At the end ofeach ORSA cycle a “lessons learned” exercise takes place to identify any potential improvementsto be applied to future ORSA cycles.

The ORSA process is overseen by the Executive Risk Committee. The quantitative output is preparedby the ORSA Process Delivery Team, which includes representatives from multiple teams across Finance,

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Actuarial and Risk. Various other functions and Subject Matter Experts across the organization alsoprovide inputs to the ORSA process.

The ORSA process captures all the material risks that the Undertaking faces or may face in the futurethat may impact meeting its obligations. The business planning process feeds directly into the ORSA.The business plan links to capital management and solvency is stressed to ensure robustness over afive year horizon.

Material risks identified within the ORSA process for which it is not considered appropriate to hold acapital buffer are addressed by identifying contingency plans.

Risk Appetite forms a key part of the ORSA providing a link between the capital and risk managementprocesses. It underpins the management and monitoring of key risks and helps shape managementinformation and executive decision making. The Undertaking's overall solvency needs are assessedtaking into account the Undertaking’s specific risk profile, approved risk tolerance limits and businessstrategy. This assessment represents the Undertaking’s own view of its risk profile and capital needs andother means needed to appropriately address these risks.

The ORSA process is conducted in its entirety at least annually and without delay following any significantchange in the risk profile of the Undertaking and this is reviewed and approved by the Board followingthe recommendations of the BRC. There will be certain events that may require the process to be run onan ad hoc basis. Such events may follow from internal decisions and external factors.

The Undertaking has processes in place to ensure that the required documentation is produced to anappropriate standard. For each ORSA, the ORSA guidelines require three reports - a record of the ORSAprocess, an ORSA internal report and an ORSA supervisory report are produced. A single report may beproduced to meet the requirements of the three reports. Supplementary documentation may be producedto support the official record and provide additional information to internal stakeholders.

In the last reporting period the Undertaking performed one ad-hoc ORSA process, which explored theimpact of commencing sales of a line of Accident & Health products via FOS.

Own Solvency NeedsThe Undertaking determines overall solvency needs taking into account the Undertaking’s specific riskprofile, approved risk tolerance limits and business strategy. This assessment represents theUndertaking’s own view of its risk profile and capital needs and other means needed to appropriatelyaddress these risks.

The Undertaking expresses the overall solvency needs in quantitative terms and complements thequantification by a qualitative description of the risks. The process undertaken ensures that the capitalmanagement activities and the risk management system are interlinked and that all key decision makingprocesses are aligned with the ORSA process.

The ORSA assessments to date indicate that the Undertaking is adequately capitalised.

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B.4 Internal control system

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B.4.1 Internal controls

The Undertaking’s Control Framework promotes the importance of having appropriate internal controlsand ensuring that all associates are aware of their role in the internal control system. The ControlFramework sets out clear standards for the design, operation, validation and oversight of the system ofInternal Control. It defines how effective internal control is achieved through joint responsibilities of thegeneral managers and the Heads of Functions.

The Control Framework defines control activities as the policies and procedures that mitigate theUndertaking’s risks to the expected level. Control activities can be preventative, corrective, detective ordirective, and include a range of activities as diverse as authorisations, segregation of duties and requiredapprovals, verifications, reconciliations, reviews of operating performance, documentation, and securityof assets.

All key controls are registered with the associated risks in the Undertaking’s risk register, and managedas part of that process to validate their effectiveness and address identified weaknesses. Ongoingmonitoring occurs in the ordinary course of operations.

Both the Heads of Functions and the branch general managers have visibility of the control effectivenessand any deficiencies in their areas. The scope and frequency of independent validation depends primarilyon an assessment of risks and the effectiveness of ongoing monitoring procedures. Internal controldeficiencies including loss events and near misses are reported, with material incidents escalated to therelevant Risk Committee.

B.4.2 Key procedures

The Undertaking’s control environment comprises an extensive catalogue of controls that are defined foreach function, and include the following:

Control Name DescriptionApproval andAuthorisation

Approval/authorisation is the confirmation or sanction of employeedecisions, events or transactions based on a review by the appropriatemanagement personnel.

Business Resumption Controls that ensure that business operations can resume in the event ofdisaster or IT outage. These controls include Business Continuity (BCP)and Disaster Recovery (DR) Planning, BCP/DR Testing, system back-upand data retention.

Code of AccountsStructure

Controls to ensure that the design of the general ledger or subledger accountcodes assists in minimising errors and allow for effective data capture andreporting.

Documentation Controls are in place ensuring decisions, exceptions, transactions, andother events are substantiated through documentation. This controlincludes confirmations, notices and/or disclosures that are required to besent to clients on a periodic or annual basis.

Hiring/Selection The hiring and selection process includes a due diligence and escalationprocess in connection with information received as a result of a backgroundcheck conducted on an individual candidate who is seeking registration,appointment or a license with the Undertaking.

Control Name DescriptionInput Form Design, Edits,and Validations

Controls that ensure the completeness, accuracy, and/or integrity of datainput into information systems. These controls include business rules builtinto the design of system interfaces to reduce the probability of data inputerrors, (e.g. required fields, acceptable values, etc.), input data validationagainst known or expected values (e.g. tolerances etc.), or verifying theintegrity and origin of data (e.g. digital signatures, hard-copy signatures,etc.).

Physical SafeguardingMechanisms

Controls that protect the Undertaking's assets through direct measures suchas locks on doors, bars on windows, use of safes to secure valuables, andother similar techniques.

Policies & Procedures There are policies and procedures describing the Undertaking's policies foroperation and the procedures necessary to fulfil the policies. There are alsoreference aids or resources available which employees can refer to assistthem in fulfilling their job responsibilities.

Process Monitoring Management monitoring controls that ensure business processes withinthe Lines of Business meet their business objectives. These controls mayinclude reviewing transaction error reports, reviewing compliance withapplicable laws/regulations (e.g. monitoring the status of claims to ensureturnaround times comply with regulatory time standards), conducting qualityassurance reviews, rejecting duplicate transactions, financial statementreviews, etc.

Reconciliations/Comparisons

Control techniques that ensure that two or more data sets/elements match,for example reconciling bank accounts, comparisons of subledger totals tocontrol accounts, comparisons of data transfer record counts, etc.

Segregation of Duties Controls segregating tasks or processes to reduce the risk of accidentalerrors and/or fraud.

Strategic Monitoring andGovernance

Management monitoring controls that ensure Lines of Business meet theirstrategic objectives. These controls include short and long-term rangeplanning, organisational design/staffing, key performance indicator reviews,risk management, enterprise architecture, data governance, knowledgemanagement, etc.

System Access Approvaland Monitoring

Controls are in place over the authorisation, identification and authenticationof associate access to IT Resources. Minimally, access to systems or datais formally approved and access is periodically reviewed forappropriateness.

System Change Control Controls are in place to ensure changes to IT systems are reviewed toensure they meet the needs of the Undertaking, perform as expected, anddo not create security vulnerabilities. These controls could include unittesting, performance testing, user acceptance testing, vulnerability testing,etc.

System Data Encryption Controls are in place to ensure sensitive data is encrypted in Undertakingsystems. Encryption controls and other methods of safeguarding data areused in at-risk IT assets such as laptops, smart phones/blackberry's andback-up tapes to prevent unauthorised data access and/or disclosure ofconfidential or sensitive information.

System Monitoring andResponse

Controls that ensure the technology environment is monitored for securityincidents, processing abends, system outages, etc. and that appropriateactions are taken based on the results.

System SecurityConfigurations

Security configurations at the software, infrastructure, hardware, or networklayers that ensure the confidentiality of data.

Third-Party Monitoring Controls that ensure that third-parties are operating in accordance withagreements and contracts and deviations are acted upon by management.

Training/Communication Controls are in place to ensure that employees, at all levels, are providedwith training activities that comply with regulatory requirements regardingtraining on products, services, procedures, rules and standards, asapplicable. The organisation has communicated its values and standardsto employees, suppliers, customers and other relevant stakeholders. Thereis a process to update and communicate these standards and relatedtraining regularly.

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Control Name DescriptionValidity/Existence Tests Controls that validate the existence of assets. Examples include physical

inventory counts to determine that quantities and descriptions of goods and/or supplies on hand are accurate, fixed asset inventories to validate theexistence of items represented in the accounts, and other similar processes.

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B.4.3 Description of Compliance Function

The Compliance Function is an important part of an effective internal control system and the three linesof defence model.  In this regard, the Undertaking is committed to having in place an effective compliancerisk management programme (MetLife Compliance Risk Management (CRM) Programme) wherever itdoes business and is guided by its core values, appropriate rules, structures, processes, training,documentation and controls to help prevent, detect and remediate compliance breaches and deficiencies.The aim of the CRM programme is to help management be reasonably assured that effective processesare in place to ensure adherence to applicable laws and regulations.  It also ensures that any complianceissues uncovered by the programme are appropriately addressed and that ownership of the compliancerisks and mitigating actions are assigned to business process owners. 

The CRM Programme consists of the following key elements:• Compliance Risk Identification and Prioritisation;• Compliance Risk and Control Assessments;• Monitoring and Testing Programme; and• Policies and Procedures.

The Board has overall responsibility for setting and overseeing compliance arrangements in theUndertaking. Management has responsibility for maintaining compliance with all applicable laws andregulations and the commitment and support of management is an essential component of a successfulcompliance programme. The core role of the Compliance Function is to standardise, document andprovide assurance to the management of the Undertaking, and ultimately to the relevant regulators, thatthe Undertaking is operating within the letter and the spirit of the legal and regulatory framework. TheCompliance Function reports to the Undertaking's Executive Committee/BRC and ultimately to the Board.

The Compliance Function performs the following actions on an annual basis: • In line with the CRM Programme, identification and assessment of compliance risk, including but

not limited to, the completion of compliance monitoring and testing to ensure independentoversight and review of policies and procedures.

• Regulatory Development (in line with the Regulatory Development Policy): ◦ Advising senior management, in conjunction with the Legal Function, on compliance with

applicable laws and regulations;◦ Assessing the possible impact of changes in the regulatory environment on the operations

of the Undertaking.• Providing an Annual Compliance Plan, including a Testing and Monitoring Plan for approval from

the Board. • Supporting a robust training programme to ensure all staff are fully up to date with and understand

all aspects of compliance rules and regulations. • Reviewing compliance procedures and controls on a regular basis. • In addition, the Head of Compliance is also responsible for providing compliance oversight of

the Compliance Function in all branches of the Undertaking.

B.5 Internal Audit Function

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B.5.1 Internal Audit

Internal Audit is an independent assessment group established within the MetLife Group as a service tomanagement and to the Audit Committee of the Board. Its mission is to protect and enhance organisationalvalue by providing risk-based assurance, advice and insight.

Internal Audit’s purpose is to provide on-going objective and independent evaluations of the adequacyand effectiveness of internal controls. It may also perform consulting advisory services and special reviewsas directed by the Audit Committee and Executive Management.

Roles and Responsibilities of Internal AuditThe scope of Internal Audit includes activities that provide reasonable assurance on:

• Whether internal controls throughout the Undertaking are operating as intended, and they providereasonable assurance that transactions are executed in accordance with managementauthorisation, that they are properly recorded, and that assets are effectively safeguarded.

• The financial reporting process used to prepare the Undertaking’s statutory and GAAP financialstatements is operating effectively.

• Whether the management reporting system provides reliable and timely information.• Departments are in compliance with Company policies and procedures.• The organisation’s risk management processes are effective.• New key systems and procedures prior to implementation or when there is a major change in an

existing key system.• The risk exposures relating to the organisation’s governance, operations, and information

systems regarding the achievement of the organisation’s strategic objectives.

Internal Audit is also involved in:

• Performing consulting and advisory services related to governance, risk management and controlas appropriate for the organisation, so long as performing such services does not impede thebasic tasks and responsibilities or independence of Internal Audit.

• Assisting the Audit Committee of the Board in exercising its fiduciary responsibilities, and apprisingthe Board (through the Audit Committee) of any significant developments warranting itsconsideration or action.

• Evaluating and investigating allegations and the possibilities of fraud, and other inappropriatetransactions, in coordination with other departments.

• Maintaining liaisons with appropriate external professional organizations and keeping informedon new developments in the field of auditing.

Internal Audit maintains an effective working relationship with the Undertaking's external auditor. ExternalAuditors perform work required to express an independent accountant's opinion on MetLife's consolidatedfinancial statements, internal controls, and other work as may be specifically requested. Internal Auditactively coordinates its efforts with the external auditors to optimize overall audit coverage and minimizecosts, where appropriate. The external auditors have access to work papers and reports produced byInternal Audit, as needed.

Internal Audit processThe Chief Auditor shall define the annual and long-term objectives of Internal Audit. Within the frameworkof these objectives, Internal Audit formally documents its risk assessment methodology and preparesaudit plans and expense budgets. These plans will be conducted at least annually and will include:

• A risk assessment of all key business processes• A schedule of audits based on the results of the risk assessment• A proposed budget that documents the level of resources and expenses that need to be committed

to provide adequate audit coverage for the audit plan• Flexibility to respond to special requests of senior management on a timely basis

The Head of Internal Audit reviews Internal Audit's planned activities for the coming year with seniormanagement and the Audit Committee. The scope of this activity will also be reviewed with appropriatemanagement in each line of business. the audit plan is locked down on a quarterly basis. Any significantdeviation from the approved internal audit plan will be communicated to the Audit Committee throughperiodic activity reports.

Reporting StructureResults and conclusions of Internal Audit work are reviewed with management directly responsible forthe activity being evaluated and such other management as appropriate. The purpose of reviewing resultsis to reach agreement on the facts presented by Internal Audit and to make management aware of InternalAudit issues before the report is released.

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B.5.2 Independence

To maintain independence and objectivity, Internal Audit does not prepare any accounting and relatedrecords or engage in any relevant activity requiring audit review. This includes the development orinstallation of new systems, policies or procedures. The review of new systems or procedures prior toimplementation is not considered an impairment of independence and objectivity.

B.5.3 Authority

Internal Audit has full and unrestricted authorisation to access all records, personnel, and physical propertyrelevant to the performance of their assignment in any functional area of the Undertaking and, wherecontractually authorised, its contractors or suppliers. All employees assist Internal Audit in fulfilling itsroles and responsibilities. Documents and information given to the Internal Audit Department are handledin the same prudent and confidential manner as by those employees normally accountable for them.

B.5.4 Performance

Internal Audit exercises due professional care in the performance of audits and other work. The Instituteof Internal Auditors (IIA) has established standards ("Standards") for the professional practice of InternalAuditing. The Standards apply to individual internal auditors and to internal audit activities. All internalauditors are accountable for conforming with the Standards related to individual objectivity, proficiency,and due professional care. In addition, internal auditors are accountable for conforming with the Standardsthat are relevant to the performance of their job responsibilities. The Chief Auditor is responsible forensuring that audit work conforms with those Standards. The IIA has also established a Code of Ethics.Each auditor is responsible to conduct him or herself so that his or her good faith and integrity are notopen to question.

B.6 Actuarial Function

The Actuarial Function is responsible for the following key deliverables within the Undertaking:

• Production of the (External) Annual “Actuarial Function Report” covering the following matters(alternatively some of these may be provided separately):◦ Report on the technical provisions;◦ Opinion on the technical provisions;◦ Opinion on underwriting;◦ Opinion on reinsurance;◦ Description of the activities of the Actuarial Function over the year.

• (Internal) Quarterly memo to management providing analysis of the Solvency II balance sheet, andsupport for sign-off (and supporting the ORSA stipulation for continuous compliance with therequirements for technical provisions);

• (Internal) Annual report to the Board on the actuarial assumptions;• (Internal) Contributions to risk management notably the ORSA, including inputs to the choice of

stresses and scenarios, and documented quality control over the projections themselves; and• (External) Actuarial opinion on the ORSA.

Note that the prefix “Internal” / “External” refers to whether the documentary outputs correspond directlyto external requirements or are internal ways to support the external requirements. For example, theassumptions report is not required separately by external requirements, but, given that the assumptionsare clearly a key element of the technical provisions, there needs to be suitable supporting documentation.

The Actuarial Function consists of the Actuarial Analysis team (as outlined in the above chart - this reflectsa snapshot of the team as at 31 December 2019 excluding contractors supporting projects). The ActuarialProduction team produces valuation results which are subsequently passed to the Actuarial Analysisteam for analysis and review before final sign off by the Head of Actuarial Function. Beyond its SolvencyII duties as Actuarial Function, the Actuarial Analysis team also contributes to a range of financial reportingand management activities.

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B.7 Outsourcing

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B.7.1 Outsourcing policy

The Undertaking outsources a range of activities in the countries it is active in, particularly in the areasof policy administration, IT, and treasury services, in order to benefit from expertise and efficiencies notpractically available internally. Each outsourcing arrangement has a functional owner in the senior teamwho is responsible for the management and first line oversight of the arrangement. The Procurementfunction co-ordinates all activities across functions.

All outsourcing is subject to the requirements of the Outsourcing Policy, which ensures that all outsourcingarrangements are subject to appropriate due diligence, approval, written agreements and on-goingmonitoring, and that the risks associated with entering outsourcing arrangements are effectively managed.The Outsourcing Policy applies to all outsourcing agreements and covers the requirements for bothexternal outsourcing and Intra-group outsourcing.

B.7.2 Details of outsourcing (including critical or important outsourcing)

The Undertaking operates on a partially outsourced model, which means that certain services (includingcertain critical or important activities of the actuarial, compliance, risk management, IT services andinternal audit functions) are provided by the following MetLife group service companies:

• MetLife Europe Services Limited, MetLife Innovation Centre Limited and MetLife Services EEIGfor Ireland jurisdiction

It is worth noting that during 2018, the Undertaking announced that certain finance and actuarial activitieswould transfer from Ireland to an existing Centre of Excellence in India and new Centres of Excellencein Poland and Malaysia in 2019. These centres form part of MetLife Services EEIG.

In addition, the Undertaking benefits from group services such as investment services from MetLifecompanies based in the UK and USA, and IT services from MetLife companies based in the USA.

In addition, the Undertaking externally outsources the following critical or important functions / activities:

Critical or importantoutsourced function / activity Jurisdiction

Complaint handlingMultiple jurisdictions (Ireland, Netherlands, Norway, Poland,Germany, Portugal, Italy and France)

Storage of policyholder data andpolicy servicing

Multiple jurisdictions (Ireland, Netherlands, Norway, Spain,Poland, Germany, Portugal, Romania, Italy and France)

Claim handlingMultiple jurisdictions (Ireland, Netherlands, Norway, Spain,Poland, Germany, Portugal, Slovakia, Romania, Italy and France)

Storage of data Multiple jurisdictions (All Undertaking branches)Inbound services (Inbound mailsand Document management)

Multiple jurisdictions (France, Spain, Portugal and Italy)

B.8 Any other information

The information provided in the sections above provide a comprehensive and complete description ofthe Undertaking’s system of governance and its continuing adequacy for the Undertaking.

C Risk profile

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C.1 Underwriting risk

C.1.1 Material exposures

The Undertaking’s primary focus is on the provision of ILOE cover as an add-on to MetLife Europe d.a.c.’score life insurance offerings. The Undertaking also provides a small book of MPI and travel insurancebusiness. During 2019 the Undertaking also commenced selling Accident and Health business in Polandon a Freedom of Services basis.

Underwriting risk refers to fluctuations in the timing, frequency and severity of insured events relative tothe expectations of the Undertaking at the time of underwriting, arising as a consequence of writingbusiness where financial outgo depends upon loss of employment, and lapse experience. This alsoincludes the potential for expense overrun relative to pricing assumptions, and includes the consequencesof writing new business in volumes or mix different to those anticipated.

The Undertaking is exposed to underwriting risks in its businesses, including premium and reserve risk.These risks are identified and assessed as part of the product development process, in which appropriateunderwriting conditions are defined for all underwriting risks associated with the insurance policies overtheir whole life cycle.

Underwriting risk has grown in line with business volumes over the reporting period.

C.1.2 Material risk concentrations

The Undertaking predominantly writes ILOE business in Italy. ILOE cover complements a credit packagefor covering loans, recurrent debts or providing income protection. The benefit payable is the installmentof the credit or the monthly recurrent debt. Due to the Italian business volumes, one of the primaryinsurance risks to which the Undertaking is exposed, is a large increase in Italian unemployment rates.This majority of this risk is reinsured.

C.1.3 Material risk mitigation practices

Underwriting risks are primarily mitigated through reinsurance, diversification and through limits andguidelines which are monitored by the PMC. The Undertaking regularly reviews the emergence of anypotential counterparty concentration, with the team responsible for the monitoring being independent ofthe underwriting and sales functions.

As outlined in the previous section, one of the primary insurance risks to which the Undertaking is exposed,is a large increase in Italian unemployment rates. The claim rates are mostly flat in Italy versus varyingunemployment rates, demonstrating the impact of Cassa Integrazione Guadagni (CASSA), which isunique to Italy. The CASSA acts as a “shock absorber’ where employees, instead of being dismissed,keep their employment contract in force and are paid while they are looking for another job or beingtrained to develop their skills to maybe return to their former company. Employees are recognised asunemployed only if all efforts to find them a new job or to get their former job fail. Employees may stayup to 12 months in CASSA. The impact of CASSA is to dampen the impact of an increase in unemploymentrates on the Undertaking’s experience.

ILOE performance, including claims experience and labour statistics, are monitored on a quarterly basis.

C.1.4 Material risk sensitivities

As required by the calculations to determine the SCR using the Standard Formula (SF), the Undertakingdetermines the impact of increases in expected loss rates, and pandemic events. The following tableshows the sensitivity in the Undertaking's capital requirements if a 1 in 200 year event (as measured bythe SF) happened for each risk category.

31-Dec-19€'000

Premium and Reserve risk 12,004Lapse risk 3,175Non-Life CAT risk 5,705

Premium and reserve risk measures the risk that the actual underwriting experience differs from theexperience expected at the time of pricing. This risk is a large component of the Undertaking's SCR, dueto the type of products sold by the Undertaking which result in premiums that include significantcommission payments.

Lapse risk arises due to the expected future profits on the Undertaking's business.

Catastrophe risk measures the change in the Undertaking's insurance liabilities due to extreme orexceptional events.

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C.2 Market risk

C.2.1 Material exposures

The Undertaking does not take on market risk as a strategic risk. The Undertaking seeks to incur onlyminimal market risk exposure as arises from its insurance business. The Undertaking is exposed tomarket risks, including interest rates due to timing differences of asset and liability cash flows and basisdifferences between valuation rates, different currencies and positions held to facilitate policyholdertransactions. In line with the Prudent Person Principle, the Undertaking invests in assets whose risks canbe properly identified, measured, managed, controlled, reported and appropriately taken into account aspart of the ORSA process.

The exposure to market risks has not changed significantly over the course of the reporting period.

C.2.2 Material risk concentrations

Market risks are concentrated to the interest rates and investment markets of the Undertaking’s majorfunctional currencies, including Euro and the Romanian Leu.

C.2.3 Material risk mitigation practices

Market risks are primarily mitigated through the Undertaking's investment limits and guidelines. Theinvestments must be made in accordance with the general principles set out in Undertaking’s StrategicInvestment Policy. In addition, investments must be made in accordance with the guidelines as approvedby the Board which provides detailed limits on permissible sector exposures.

C.2.4 Material risk sensitivities

As required by the calculations to determine the SCR using the SF, the Undertaking determines theimpact of changes in interest rates, currency values (against the Euro), equity levels, and credit spreads.The following table shows the sensitivity in the Undertaking's capital requirements if a 1 in 200 year event(as measured by the SF) happened for each material risk category. The Undertaking has no materialexposure to equity risk or property risk.

31-Dec-19€'000

Interest rate risk 774Currency risk 1,618Concentration risk 430

The Undertaking does not have material exposures to market risk, due to the investment strategy in placeand the short term nature of the products being sold. The Undertaking's concentration risk arises mainlyfrom exposure to Bayerische Motoren Werke AG, Motability Operations Ltd and Nationwide BuildingSociety.

The estimated impact on net investment income in the IFRS Statement of Comprehensive Income of aone percentage point increase in yield curves is €0.8 million (2018: €1.1 million).

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C.3 Credit risk

C.3.1 Material exposures

The Undertaking is exposed to credit risks (i.e. the risk of a value decrease of assets or increase ofliabilities due to the default of third parties, or the increase of the probability of such a default and/or theassociated loss). Exposure to credit risk comes from the investment portfolio, reinsurers and othercounterparty receivables.

The exposures to credit risks have remained relatively stable over the reporting period. The increase inthe counterparty risk SCR primarily relates to a methodology change over the period.

C.3.2 Material risk concentrations

The Undertaking maintains a highly diversified, well rated investment portfolio and routinely monitorsand limits credit exposures at counterparty and aggregate level.

Material reinsurance arrangements are with highly rated reinsurers and/or are appropriately collateralised.

C.3.3 Material risk mitigation practices

Credit risks are primarily mitigated through asset allocation, diversification and single-exposure limits.For counterparty exposures, the Undertaking may require the placement of collateral.

C.3.4 Material risk sensitivities

As required by the calculations to determine the SCR using the SF, the Undertaking determines theimpact of changes in credit spreads and a potential extreme loss of counterparty exposures which areset out in the following table. The following table shows the sensitivity in the Undertaking's capitalrequirements if a 1 in 200 year event (as measured by the SF) happened for each risk category.

31-Dec-19€'000

Spread risk 1,229Counterparty default risk 3,657

The investment portfolio is exposed to credit spread movements, whilst counterparty default riskexposures arise primarily from reinsurance arrangements and third party receivables. All credit riskexposures are mitigated as described above.

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C.4 Liquidity risk

C.4.1 Material exposures

The Undertaking is exposed to liquidity risks where it is obliged to settle liabilities at short notice andassets cannot be liquidated at all or only with very significant haircuts.

Management of liquidity risk to ensure that the Undertaking can, at all times, meet its liabilities as theybecome due, forms a key part of the Undertaking achieving its business objectives and meeting itsregulatory requirements. Proper management of liquidity risk is mirrored in the Undertaking’s managementof credit risk and market risk, which significantly reduce the risk of contagion from credit risk and marketrisk.

The exposures to liquidity risks have remained stable over the course of the reporting period. Liquidassets reduced as a result of the payment of the 2019 dividend but overall the Undertaking remains highlyliquid.

The Undertaking’s investments are typically highly liquid. In its assessment of liquidity, the Undertakingcan also take into account the cash inflows and outflows from its insurance business. The total amountof the expected profit included in future premiums (EPIFP) as calculated in accordance with Article 260(2) was €4.1m as at 31 December 2019.

C.4.2 Material risk concentrations

In line with Investment Guidelines, the Undertaking maintains a highly diversified portfolio and limits theexposure to individual obligors. Concentrations can arise where the Undertaking’s liquidity needs aretriggered by individual events. Liquidity stress testing is carried out to ensure that sufficient liquidity wouldbe available in such events.

C.4.3 Material risk mitigation practices

Liquidity risks are primarily mitigated through asset allocation, diversification and single-exposure limits,and by avoiding entering obligations to provide liquidity to counterparties.

The Undertaking specifies quantitative and qualitative limits on its liquidity risk exposures, includingspecific risks that the Undertaking is not willing to accept.

C.4.4 Material risk sensitivities

The Undertaking performs regular stress tests of its liquidity position in adverse events, includingsignificant and abrupt changes in financial markets and policyholder behaviour. These stress testsconsider the timing of obligations and the ability to liquidate assets over different time horizons, as wellas the impact of such liquidations on realised values.

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C.5 Operational risk

C.5.1 Material exposures

The Undertaking is exposed to operational risk consistent with other financial institutions, including theimpact of changes in the regulatory and legal environments, the dependency on multiple internal andexternal operators (for investment activities as an example) and complex modelling for financial reportingand solvency reporting. Operational risks are identified and assessed with regards to their frequency andpotential impact as part of the risk management process, in which risks and controls are documented,by risk owners and validated by the Risk Management Function. As the Undertaking continues to evolveoperationally, it aims to maintain a stable operational risk environment over the plan horizon.

C.5.2 Material risk concentrations

The Undertaking prefers to concentrate activities in focused and tightly-controlled operations and ensuresthat operations have independent review, alternative back-up sites, and business continuity plans.

C.5.3 Material risk mitigation practices

Operational risks are primarily mitigated through functional controls, which are integral elements of theUndertaking’s Risk Framework and independently validated on a regular basis.

C.5.4 Material risk sensitivities

Each operational risk is rated regarding frequency and potential impact on an inherent basis (i.e. beforeeffective control) and on a residual basis (i.e. taking into account effective controls) to create a currentrisk heat map. Control remediation action plans are put in place as and when required.

C.6 Other material risks

Since 31 December 2019, the COVID-19 virus has caused a pandemic, and governments and businesseshave taken measures such as travel bans, quarantines, and social distancing to combat the spread ofthe virus.  These have disrupted business activity, as well as causing economic slowdown and significantvolatility in financial markets. The Undertaking activated its business continuity plan with the majority ofstaff working from home, where possible. The Undertaking cannot determine or estimate the extent towhich these events have affected the Undertaking’s operations, business, financial results, or financialcondition. In general under Solvency II, EU insurance companies are required to hold sufficient eligibleown funds on an on-going basis to cover their Solvency Capital Requirement. The risk-based SolvencyCapital Requirement enables insurance undertakings to absorb significant losses and give confidenceto policyholders and beneficiaries that payments will be made as they fall due. Based on the results ofthe 31 December 2019 Solvency II valuation and of the 2019 Own Risk Solvency Assessment, andnotwithstanding the emergence of COVID-19 (as a non-adjusting post balance sheet event), there is noexpectation of non-compliance with the Minimum Capital Requirement or SCR over the planning horizon.

In addition to the risks covered above, the Undertaking may in the future also be exposed to emergingrisks. The Undertaking currently considers disruptive technology (including transformative technologyfor insurance distribution (InsurTech) and cybersecurity issues) as a key emerging risk. Evolvingregulatory changes on data protection and business conduct, that can transform the insurance industry,are also closely monitored. The Undertaking's operating model is dependent on the stability of the EUsingle market. The Brexit situation (including the emerging risk of potential for changes in the solvency

regime or other divergence in legislation in the future) and political risks in general, are monitored on anon-going basis.

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C.7 Any other information

The Undertaking has a strategic role to support MetLife Europe d.a.c., therefore its success dependsupon the success of this entity. The Undertaking reviews its risk exposures regularly and considerspotential actions to align exposure to risk appetite.

D Valuation for solvency purposes

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D.1 Assets

Basis of valuation

The valuation of assets for Solvency II has been determined in line with the Solvency II Directive andrelated guidance.

Unless expressly stated in the notes below, the Undertaking has valued its assets at fair value. In orderto establish the fair value of assets, the following guiding principle has been applied:

• Assets are valued at the amounts for which they could be exchanged between knowledgeablewilling parties in an arm’s length transaction.

The determination of fair value of financial assets, which comprise substantially all of the assets of theUndertaking, is set out below.

Fair value of financial assets with active market

When available, the fair value of financial assets is based on quoted prices in active markets that arereadily and regularly obtainable. These are the most liquid of the Undertaking's financial assets, andvaluation of these assets does not involve management's judgement.

Fair value of financial assets with no active market

When developing fair values, where quoted prices are not available, the Undertaking uses one of threebroad valuation techniques or a combination thereof: (i) the market approach, (ii) the income approach,and (iii) the cost approach.

The significant inputs to these valuation techniques are inputs that are observable in the market or canbe derived principally from, or corroborated by, observable market data. When observable inputs are notavailable, inputs that are not observable in the market or cannot be derived principally from, or corroboratedby, observable market data, are used. These unobservable inputs are based in large part onmanagement's judgement or estimation, and cannot be supported by reference to the market activity.Even though these inputs are unobservable, management believes they are consistent with what othermarket participants would use when pricing such financial assets, and are considered appropriate giventhe circumstances. Actual results may differ materially from these estimates.

Such estimates are reviewed on an ongoing basis, and any difference recognised in the period in whichthe estimate is revised if the revision affects only that period, or in the period of the revision and futureperiods if the revision affects both current and future periods.

For deposits within one year of the balance sheet date, the Undertaking believes that the fair value isrepresented by the amounts realisable, on account of their short term nature.

The following table shows the assets of the Undertaking as reported in the Balance Sheet QRTSE.02.01.16 under Solvency II, and comprises figures produced under both Solvency II and in theUndertaking's financial statements. The financial statements have been prepared in accordance withIFRS.

Assets of the Undertaking as at 31 December 2019

AssetsSolvency II

valueReclassification

differencesValuation

differences IFRS value€'000 €'000 €'000 €'000

Deferred acquisition costs — — 8,852 8,852Intangible assets — — 1,029 1,029Deferred tax assets 635 — 232 867Property, plant and equipmentheld for own use 23 — — 23Government Bonds 7,914 335 — 8,249Corporate Bonds 27,707 (159) — 27,548Collective InvestmentsUndertakings 13 — — 13Deposits other than cashequivalents 8,754 (7,883) — 871Reinsurance recoverables 24,751 (2,150) 44,679 67,280Insurance and intermediariesreceivables 11,907 — — 11,907Reinsurance receivables 309 2,150 1 2,460Receivables (trade, notinsurance) 4,824 295 740 5,859Cash and cash equivalents 8,606 7,412 (1) 16,017Total Assets 95,443 — 55,532 150,975

The Solvency II liabilities are compared to the IFRS liabilities in section D.3. The valuation differencesbetween the Solvency and IFRS excess of assets over liabilities is set out in section E.1.2.

The items on the Solvency II and IFRS balance sheet may be disclosed in different categories. The‘reclassification’ column above includes such amounts where there is a different classification betweenSolvency II and IFRS. There is no net bottom line reclassification difference between the assets in thissection and the liabilities in section D.3.

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D.1.1 Deferred acquisition costs

Under Solvency II, deferred acquisition costs (DAC) do not represent a recognisable asset. Cash outflowson acquisition are expensed when incurred.

Under IFRS, the costs incurred during the financial year that are directly attributable to the successfulacquisition of new business are deferred to the extent that they are expected to be recoverable out offuture margins in revenues on these contracts. Accordingly, the two amounts differ on account of thedifferent accounting policies applied.

A portion of the DAC asset held for the Spain business is allocated to an Unearned Commission Asset(UCA) to reflect the clawback arrangement in place for associated commission payments. As commissionis earned, it is moved to DAC. The gross UCA is disclosed in other assets and the ceded UCA is disclosedin other payables in IFRS. The UCA is not recognised under Solvency II.

D.1.2 Intangible assets

Intangible assets include those payments made to third party distributors for exclusive distribution rightsobtained by the Undertaking.

Under Solvency II, intangible assets are not recognised unless the Undertaking is able to sell the assetfor a price derived from an active market. Thus the Undertaking does not recognise intangible assetsunder Solvency II.

Under IFRS, intangible assets are stated at cost less accumulated depreciation. Intangible assets arerecognised if the undiscounted future cash flows exceed the initial cost of the asset. Intangible assetsare amortised over its useful life and amortisation methods are either proportional to expected profits orexpected premiums. Accordingly, the two amounts differ on account of the different accounting policiesapplied.

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D.1.3 Deferred tax assets

Under Solvency II, deferred tax assets are recognised on the estimated future tax effects of temporarydifferences, unused tax losses carried forward and unused tax credits carried forward. Deferred tax isonly recognised where it is probable that it will be realised, i.e. that future taxable profits will be availableagainst which deductible temporary differences can be utilised. Deferred tax is measured at the tax ratesthat are expected to apply in the period in which the liability is settled or the asset realised, based on thetax laws enacted or substantively enacted at the reporting date, on an undiscounted basis. Whendetermining whether deferred tax assets can be realised, the Undertaking considers projected futuretaxable profits in excess of those profits arising from the reversal of existing taxable temporary differences.

Deferred tax assets are not set off against deferred tax liabilities, unless such assets and liabilities havearisen in the same tax jurisdiction, in line with local legislation and practice.

The principles under which deferred tax assets and liabilities are recognised under Solvency II are broadlysimilar to those under IFRS.

However, there are differences in the carrying value of underlying assets and liabilities, which give riseto temporary differences between carrying value and tax base. Accordingly, the two amounts differ onthe balance sheets.

The following table sets out the composition of the deferred tax balances under Solvency II, as at thereporting date, and a comparison against the deferred tax balances under IFRS:

Solvency II IFRS2019 2019€'000 €'000

Other local deferred items 590 590Losses carried forward 116 116Differences between Solvency II and IFRS balance sheet (381) —

Net deferred tax balance 325 706

All branches are profitable under estimated local tax base. The following branches have net deferred taxassets:

2019 2018€'000 €'000

Slovakia 116 117

The deferred tax asset in Italy was not recognized at year end 2019 for Solvency II or IFRS purposes.This is based on an assessment of the future recoverability of the asset including analysis of historicallocal taxable profits and projections of future local profits.

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D.1.4 Investments

Under Solvency II, investments are stated at fair value except for strategic participations (the Undertakingdoes not hold strategic participations). Financial assets and liabilities are recognised when theUndertaking becomes a party to the contractual provisions of the instrument. All financial instrumentsreported at fair value are measured based on an exit price.

The valuation techniques and source of pricing inputs used by the Undertaking for significant categoriesof investments are produced below:

D.1.4.1 Bonds

Government bonds listed on a recognised exchange are valued using the quoted prices for identicalinstruments.

Government bonds which are not listed, are principally valued using the market approach. Valuationsare based primarily on matrix pricing or other similar techniques using standard market observable inputsincluding benchmark yields, issuer ratings, broker-dealer quotes, issuer spreads and reported trades ofsimilar instruments, including those within the same sub-sector or with a similar maturity or credit rating.Government bonds for which observable inputs are not available, are principally valued using the marketapproach. Valuations are based primarily on independent non-binding broker quotations and inputsincluding quoted prices for identical or similar instruments that are less liquid and based on lower levelsof trading activity. Certain valuations are based on matrix pricing that utilise inputs that are unobservableor cannot be derived principally from, or corroborated by, observable market data, including credit spreads.

Corporate bonds listed on a recognised exchange are valued using quoted prices or quoted prices forsimilar assets.

Corporate bonds which are not listed, are principally valued using the market and income approaches.Valuations are based primarily on quoted prices for similar listed instruments in active markets, quotedmarket prices for similar listed instruments in markets that are not considered active, or using matrixpricing or other similar techniques that use standard market observable inputs such as benchmark yields,spreads off benchmark yields, new issuances, issuer rating, duration, and trades of identical or comparableinstruments. Privately-placed instruments are valued using matrix pricing methodologies using standardmarket observable inputs and inputs derived from, or corroborated by, market observable data includingmarket yield curve, duration, call provisions, observable prices and spreads for similar publicly traded orprivately traded issues that incorporate the credit quality and industry sector of the issuer, and in certaincases, delta spread adjustments to reflect specific credit-related issues.

Corporate bonds for which observable inputs are not available, are principally valued using the marketapproach. Valuations are based primarily on matrix pricing or other similar techniques that utiliseunobservable inputs or inputs that cannot be derived principally from, or corroborated by, observablemarket data, including illiquidity premium, delta spread adjustments to reflect specific credit-related issues,credit spreads, and inputs including quoted prices for similar instruments that are less liquid and basedon lower levels of trading activity. Certain valuations are based on independent non-binding brokerquotations.

Under IFRS, bonds are stated at fair value. Accordingly, there are no differences between Solvency IIand IFRS.

D.1.4.2 Collective Investments Undertakings

Collective investments undertakings listed on a recognised exchange are valued using the quoted pricesprovided by the investment managers, that are based on their respective net asset values.

Unlisted investment funds are principally valued based on prices from the investment managers, whichare based on European Venture Capital Association Guidelines, including price/earnings ratio basedvaluation. The prices released by investment managers of the underlying funds are reviewed and whereappropriate, adjustments are made to reflect the impact of changes in market conditions between thedate of the valuation and the end of the reporting period. The valuation of these investment funds islargely based on inputs that are not based on observable market data.

Under IFRS, collective investments undertakings are stated at fair value. Accordingly, there are nodifferences between Solvency II and IFRS.

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D.1.4.3 Deposits other than cash equivalents

Deposits other than cash equivalents comprise of demand deposits. These are carried at fair value onthe Solvency II balance sheet, which are based on the amounts due on demand.

Under IFRS, demand deposits are stated at carrying value which approximates to fair value. Accordingly,there is no difference between the two amounts.

D.1.5 Reinsurance recoverables

Under Solvency II, reinsurance recoverables are valued using the cash-flow projection model similar tothat used to calculate the best estimate of liabilities.

The reinsurance recoverables are adjusted for expected defaults using internal assumptions. Furtherinformation on the best estimate of liabilities, its valuation methodology, basis and assumptions used canbe found in section D.2.

Under IFRS reinsurance recoverables are valued using the same methods used to calculate technicalprovisions. Accordingly, there are differences between the value of reinsurance recoverables on the twobalance sheets.

D.1.6 Insurance and intermediaries receivables

This relates to the amounts due from policyholders, insurance intermediaries and other insurers linkedto inward reinsurance business.

Under Solvency II, these are stated at fair value.

Under IFRS, receivables and other assets are recorded at cost less any irrecoverable amounts and arean approximation of the fair value of these assets. Accordingly, there are no differences between SolvencyII and IFRS.

D.1.7 Reinsurance receivables

Reinsurance receivables relate to claims and commissions settled but not yet paid by reinsurers.

Under Solvency II, these are stated at fair value.

Under IFRS, receivables and other assets are recorded at cost less any irrecoverable amounts and arean approximation of the fair value of these assets. Accordingly, there are no differences between SolvencyII and IFRS, other than those attributable to timing.

D.1.8 Receivables (trade, not insurance)

Under Solvency II, these are stated at fair value.

Under IFRS, trade receivables are recorded at cost less any irrecoverable amounts and are anapproximation of the fair value of these assets. Accordingly, there are no differences between SolvencyII and IFRS in relation to trade receivables. See section D.1.1 for details of gross UCA which is disclosed in other assets in IFRS but is not recognisedunder Solvency II.

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D.1.9 Cash and cash equivalents

Cash and cash equivalents are carried at fair value on the Solvency II balance sheet, which is based onthe amounts due on demand.

Under IFRS, cash and cash equivalents are stated at carrying value which approximates to fair value.Accordingly, there is no difference between the two amounts.

Bank overdrafts are disclosed in debts owed to credit institutions in IFRS and Solvency II.

D.1.10 Any other information on assets

Estimation uncertaintyThe key source of estimation uncertainty arises in deferred tax assets (section D.1.3).

Asset levellingThe following table provides an analysis of financial assets that are measured subsequent to initialrecognition at fair value, grouped into Levels 1 to 4 on the degree to which the fair value is observable.

• Level 1: quoted prices in active markets for identical assets;• Level 2: quoted prices in active markets for similar assets;• Level 3: inputs other than quoted prices in active markets for identical or similar assets that are

observable for the asset directly (i.e. as prices) or indirectly (i.e. derived from prices); and• Level 4: inputs not based on observable market data.

Asset Category Level 1 Level 2 Level 3 Level 4

TotalSolvency

II2019 2019 2019 2019 2019€'000 €'000 €'000 €'000 €'000

Cash and cash equivalents 8,605 — — — 8,605Corporate Bonds — 27,707 — — 27,707Deposits other than cash equivalents 871 7,883 — — 8,754Government Bonds — 7,914 — — 7,914Investment funds 13 — — — 13Property, plant & equipment held for own — — — 23 23Grand Total 9,489 43,504 — 23 53,016

All other information has been disclosed in the preceding sections.

D.2 Technical provisions

The technical provisions correspond to the current amount the Undertaking would have to pay if theywere to transfer their insurance obligations immediately to another Undertaking. The value of technicalprovisions are equal to the sum of a best estimate liability and a risk margin. The methodology employedin the calculation of the best estimate liability is covered in section D.2.3 and the risk margin is coveredin section D.2.7.

The insurance obligations have been segmented into homogeneous risk groups (HRGs) when calculatingthe technical provisions. The approach to segmentation is covered in section D.2.1.

The best estimate liability includes two separate components:

• Premium provision, which allows for future benefits and expenses, net of future premiums, iscalculated using a discounted cash flows approach, based on best estimated demographic andexpense assumptions, and using the prescribed EIOPA yield curve for discounting.

• Provisions for outstanding claims, which include a reserve for claims already reported but notsettled (RBNS) and a reserve for claims assumed to have already been incurred but not reported(IBNR).

The above liabilities are calculated gross, without deduction of the amounts recoverable from reinsurancecontracts. Such recoverable amounts are calculated separately and are covered in section D.2.4.

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D.2.1 Segmentation

Under Solvency II, undertakings should properly segment the business into the lines of business specifiedin the guidelines. The primary segmentation distinguishes between life and non-life insurance obligations.The distinction does not coincide with the legal definition, but rather with how the contract is pursued ona similar technical basis, i.e. life insurance will be considered a life insurance obligation and likewisenon-life will be considered a non-life obligation.

Life business is segmented into seventeen lines of business. The non-life insurance obligations are furthersegmented into twelve lines of business. In respect of the Undertaking, the following are the only linesof business:

• Miscellaneous Financial Loss; • Similar to Life Techniques (SLT) Health Insurance; and• Assistance

Miscellaneous Financial Loss includes ILOE and MPI. Health Insurance includes Personal Accident.Assistance includes Travel Insurance.

D.2.2 Technical provisions split by line of business

Technical provisions split by gross and net of reinsuranceIllustrated below is breakdown of gross and net technical provisions by line of business:

Line ofBusiness

Gross ofReinsurance

ReinsuranceRelief

Net ofReinsurance

Gross ofReinsurance

ReinsuranceRelief

Net ofReinsurance

2019 2019 2019 2018 2018 2018€'000 €'000 €'000 €'000 €'000 €'000

Healthinsurance 12 — 12 — — —Total Life 12 — 12 — — —

Assistance 135 (94) 41 101 (64) 37Miscellaneousfinancial loss 33,380 (24,657) 8,723 27,024 (18,208) 8,816 Total Non-Life 33,515 (24,751) 8,764 27,125 (18,272) 8,853

TotalTechnicalProvisions 33,527 (24,751) 8,776 27,125 (18,272) 8,853

Gross technical provisions split by best estimate liability and risk marginThe table below presents the breakdown of gross technical provisions by lines of business into BestEstimate Liability (BEL) and risk margin (methodology is covered in sections D.2.3 and D.2.7 respectively).

Line ofBusiness BEL

RiskMargin

Gross TechnicalProvision under

Solvency II BELRisk

Margin

Gross TechnicalProvision under

Solvency II2019 2019 2019 2018 2018 2018€'000 €'000 €'000 €'000 €'000 €'000

Healthinsurance(directbusiness) 12 — 12 — — —Gross TotalLife 12 — 12 — — —

Assistance 8 127 135 (28) 129 101

Miscellaneousfinancial loss 29,388 3,992 33,380 23,392 3,632 27,024Gross TotalNon-Life 29,396 4,119 33,515 23,364 3,761 27,125

Total GrossTechnicalProvisions 29,408 4,119 33,527 23,364 3,761 27,125

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Gross technical provisions increased by €6.4m from €27.1m in 2018 to €33.5m in 2019. Net technicalprovisions remained relatively stable over the period, decreasing by €0.1m from €8.9m in 2018 to €8.8min 2019. The change in net technical provisions is driven principally by the following offsetting items:

• Assumption changes: (€1.24m): Assumption updates decreased the technical provisions. Thiswas driven in particular by updates to most of the demographic and expense assumptions acrossthe board.

• Model changes: €0.17m: There were some updates which increased the technical provisions,e.g. refinements to projection models, methodological changes following EIOPA guidelines andamendments to the Delegated Regulations.

• New business, experience & market movements: €1m: Changes in relation to new business,actual experience and market movements (e.g. interest rates), and roll forward of the technicalprovisions on the in-force business (release of cashflows and risk margin, unwind of discountrate). These increased the technical provisions.

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D.2.3 Best estimate

D.2.3.1 Methodology for the calculation of the best estimate

For all lines of business, the best estimate premium provision corresponds to the probability weightedaverage of future cash-flows taking account of the time value of money.

D.2.3.2 Cash-flow projections

The cash-flow projections reflect the expected realistic future demographic, legal, medical, technological,social and economic developments over the lifetime of the insurance and reinsurance obligations.

D.2.3.3 Recognition and derecognition of insurance and reinsurance contracts for solvencypurposes

The Undertaking observes the process of recognition and derecognition of its insurance obligations inline with the technical specifications, which states:

The calculation of the best estimate only includes future cash-flows associated with recognised obligationswithin the boundary of the contract. No future business is taken into account for the calculation of technicalprovisions.

An insurance obligation is initially recognised by insurance undertakings at whichever is the earlier of thedate the Undertaking becomes a party to the contract that gives rise to the obligation or the date theinsurance cover begins.

A contract is derecognised as an existing contract only when the obligation specified in the contract isextinguished, discharged, cancelled or expires.

D.2.3.4 Time horizon

For all of the calculations of best estimate, a projection period of 50 years has been assumed. Thisadequately accounts for all material cash-flows in the portfolio.

D.2.3.5 Gross cash-flows

The cash-flow projection used in the calculation of the best estimate takes account of all the cash in-andout-flows required to settle the insurance obligations over the time horizon.

D.2.3.6 Gross cash in-flows

The best estimate includes items such as future premiums and other policyholder payments but doesnot take into account investment returns. Premiums which are due for payment by the valuation date areshown as a premium receivable on the balance sheet.

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D.2.3.7 Gross cash out-flows

The cash out-flows are calculated and include future benefits payable to the policyholders or beneficiaries,expenses that will be incurred in servicing insurance obligations, commissions, benefits and tax payments.

D.2.3.8 Non-Life insurance obligations

The methodology applied by the Undertaking for the calculation of the premium provision and theoutstanding claims provisions complies with the Non-Life insurance obligations (Article 36 of the DelegatedActs).

D.2.3.9 Life insurance obligations

The life insurance business is small in relation to the non-life business.

D.2.3.10 Valuation of future discretionary benefits

This is not applicable to the Undertaking.

D.2.3.11 Claims Provision

The outstanding claims reserves are “best estimate” balances common to US GAAP and IFRS andcomprise those already RBNS and those IBNR.

For the Undertaking, the computation of RBNS does not generally require complex actuarial techniques,being a simple multiplication of a known benefit amount by a rate of declinature. RBNS is generallycalculated by the Operations Function and booked by Finance, subject to consultation with Actuarial ondeclinature rates. For claims subject to periodic payments over a duration (in particular, payments forILOE, where the maximum payment period and hence maximum number of payments is defined in thepolicy provisions), an assumption relative to the average expected number of payments is also used inthe calculation of the RBNS reserve for claims reported.

The computation of IBNR does require application of actuarial techniques of moderate complexity, basedon extrapolation of historic claims and premiums data (using “claims triangle” or “loss ratio” techniques).

D.2.4 Reinsurance recoverables

The calculation of amounts recoverable from reinsurance contracts follow the same principles andmethodology as presented above for the calculation of other parts of the technical provisions (i.e. premiumprovision and claims provisions respectively).

Where the timing of recoveries for direct payments markedly diverge this has been taken into accountin the projection of cash-flows. Where the timing is sufficiently similar to that for direct payments the timingof direct payments has been used.

The amounts recoverable have been calculated consistently with the boundaries of the insurancecontracts to which they relate.

The expenses incurred in relation to the management and administration of reinsurance contracts areallowed for in the calculation of the best estimate.

The amounts recoverable (excluding those related to RBNS and IBNR) from reinsurance contracts areadjusted to take account of expected losses due to default of the counterparty. This adjustment is

calculated separately and is based on an assessment of the probability of default of the counterparty andthe average loss-given-default.

Reinsurance recoverables related to the outstanding claims reserves are not adjusted for the probabilityof the default of the reinsurance counterparty. While this represents an exception to the prescribedapproach from the regulations, the impact of using an alternative approach has been assessed and foundimmaterial for the claims provisions of the Undertaking.

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D.2.5 Discounting

General

Reinsurance recoverables related to the outstanding claims reserves are not discounted. While thisrepresents an exception to the prescribed approach from the regulations, the impact of using an alternativeapproach has been assessed and found immaterial for the claims provisions of the Undertaking, in lightof the short duration of the business.

Illiquidity premium

This is no longer relevant under Solvency II.

D.2.6 Calculation of technical provisions as a whole

The calculation of technical provisions as a whole is not applicable to the Undertaking.

D.2.7 Risk margin

The risk margin is calculated by line of business and is then added to the BEL in order to obtain thetechnical provisions by line of business. The risk margin is calculated by:

• Projecting the non-hedgeable SCR components at each future time period, using appropriate riskdrivers;

• Aggregating the projected non-hedgeable SCR components using the prescribed correlationmatrices;

• Taking a charge of 6% per annum on the run-off of the SCR; and • Discounting those amounts at the risk-free rates.

D.2.8 Approximation of technical provisions

Technical provisions - Adjustments

Due to modelling or data limitations on certain lines of business, certain components of the BEL areallowed for via Adjustments. The basis for the Adjustments will vary from item to item.

Technical provisions - Paid-Up option

The Undertaking does not currently model the option to make policies paid up.

The paid up option is not available to the Undertaking, since the majority of this business is single premium(SP) and the regular premium business does not provide cover if the premium is not paid.

The Undertaking models surrender payments for SP business as this option is available to clients, wherethey switch cover to another provider or where there is an early repayment of the underlying loan forILOE business.

D.2.9 Level of uncertainty associated with technical provisions

Levels of uncertainty associated with technical provisions

In the calculation of technical provisions, it is necessary to make judgements, estimates and assumptionsabout the carrying amounts of assets and liabilities that are not readily apparent from other sources. Theestimates and associated assumptions are based on historical experience and other factors that areconsidered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on periodic basis.

Best estimate liabilityThe premium provision represents the present value of future benefits (events expected to occur in thefuture) to be paid to the policyholders or on behalf of the policyholders and related expenses less thepresent value of future premiums.

The key assumptions concerning the future, and other key sources of estimation uncertainty at thereporting date that could impact the valuation of the best estimate liability, are discussed below.

Key assumptions used in calculating the best estimate liability:

• Expected future economic conditions (limited to the risk-free interest rates for the Undertaking);• Direct per policy maintenance expenses;• Claims incidence rates based on selected published actuarial mortality tables; and• Lapse rates based on expected surrender experience.

The reserve for RBNS claims represents a provision for future payments expected in relation to claimsalready incurred and reported to the Undertaking, and all related expenses.

Key assumptions used in calculating the best estimate RBNS are:

• Claims declinature rate; and• Expected number of future payments (for claims payable as periodic amounts)

The reserve for IBNR claims represents a provision for future payments expected in relation to claimsalready incurred but not yet reported to the Undertaking, and all related expenses.

The only key assumptions for this type of provision, limited to cases where an Ultimate Loss Ratio (ULR)approach is used, is the definition of the ULR assumption.

Expert judgementExpert judgement is necessary in the calculation of the best estimate liability in a number of differentways:

• Selection of data to use, correcting errors and deciding on the treatment of outliers or extremeevents;

• Selection of realistic assumptions and the period of data on which such assumptions are based;• Selection of the valuation technique considering appropriate alternative methodologies;• Incorporating appropriately in the calculations the environment under which the Undertaking

operates its business; and• Adjusting the data to reflect current or future conditions and adjusting external data to reflect the

portfolio.

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D.2.10 Matching adjustment

This is not applicable to the Undertaking.

D.2.11 Volatility adjustment

This is not applicable to the Undertaking.

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D.2.12 Transitional risk-free interest rate-term structure

This is not applicable to the Undertaking.

D.2.13 Transitional deduction

This is not applicable to the Undertaking.

D.2.14 Differences between Solvency II valuation and IFRS

The table and the associated explanations below provide key differences between technical provisionsunder Solvency II and those presented in the Undertaking's financial statements:

Analysis ofDifferences

MiscellaneousFinancial Loss Assistance

SLT HealthInsurance Total

2019 2019 2019 2019€'000 €'000 €'000 €'000

Technical Provisionsunder IFRS 80,780 308 12 81,100Assumption &MethodologyDifferences

(55,329) (322) — (55,651)RBNS classificationdifferences 3,937 22 — 3,959Items in Solvency II notin IFRS (Risk Margin) 3,992 127 — 4,119Gross TechnicalProvisions underSolvency II 33,380 135 12 33,527

There are many significant differences between the technical provisions in the financial statements underIFRS and the technical provisions under Solvency II.

Assumption and Methodology DifferencesSolvency II and IFRS have different rules for classifying/grouping insurance contracts, and these rulesaffect the valuation of the liabilities.

Solvency II capitalises all future profits, subject to contract boundaries, whereas IFRS generally doesnot. IFRS valuation adopts a net premium valuation methodology on regular premium business.

Solvency II assumptions are all best estimate whereas IFRS may apply Provisions for Adverse Deviations(PADs) to the assumptions used to value the reserves, according to classification rules.

Items in Solvency II but not in IFRSSolvency II determines a risk margin based on the concept of the cost of capital (for risks that are nothedgeable), whereas this concept does not generally apply to IFRS (this might be considered as analogousto the PAD under IFRS).

ReclassificationRBNS balances are disclosed in technical provisions in Solvency II but in payables in IFRS.

D.2.15 Information on Actuarial Methodologies and Assumptions

Principal assumptions used in the determination of technical provisions

Solvency II requires assumptions to be based on best estimate. The assumptions are revised on a regularbasis to adjust for recent experience and changes to market factors.

The principal assumptions used in the determination of technical provisions are included in this sectionbut do not reflect all assumptions used.

Notes on the Assumptions

1. Demographic Assumptions

Mortality, morbidity and incidence rates (for ILOE business) assumptions are generally based on publishedtables updated to allow for the results of the experience studies. The published tables are generallycountry specific, and may be product specific. In many cases the original table will be selected by productand then used also for valuation. In some cases the table will be provided by a reinsurer.

Lapse/surrender/persistency assumptions tend to be Undertaking specific but may be influenced bymarket data. This is also true of unemployment claim rates particularly relevant to the Undertaking.

2. Expense Assumptions

Expense assumptions are based on the results of the expense studies. They are entirely Undertakingspecific, not only in the manner that they reflect the plan expense base of the Undertaking, but also inthe way that the Undertaking allocates expenses between acquisition and maintenance and by line ofbusiness.

The Undertaking writes primarily ILOE business sold in conjunction with life coverages issued by MetLifeEurope d.a.c.

Expense assumptions are therefore determined jointly across both legal entities within the credit line ofbusiness, and are applied as a proportion of the relevant premium segmented between the 2 entities.

3. Economic Assumptions

Noting that Solvency II prescribes future capital market economic assumptions to be “risk neutral”, withrisk free interest rates published by EIOPA, economic assumptions are effectively limited to expenseinflation.

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D.3 Other liabilities

Liabilities of the Undertaking as at 31 December 2019

LiabilitiesSolvency II

valueReclassification

differencesValuation

differences IFRS value€'000 €'000 €'000 €'000

Technical Provisions - Non-life 33,515 (3,959) 51,544 81,100

Technical Provisions- Life 12 — (12) —Provisions other than technicalprovisions — — — —Deferred tax liabilities 310 — (149) 161Debts owed to credit institutions 167 — — 167Insurance and intermediariespayable 22,493 3,959 — 26,452Reinsurance payables 3,375 — 484 3,859Payables (trade, not insurance) 3,373 24 — 3,397Financial liabilities 24 (24) — —

Total Liabilities 63,269 — 51,867 115,136

Excess of assets over liabilities 32,174 — 3,665 35,839

The Solvency II assets are compared to the IFRS assets in section D.1. The valuation differences betweenthe Solvency and IFRS excess of assets over liabilities is set out in section E.1.2.

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D.3.1 Provisions other than technical provisions

Provisions are recognised when the Undertaking has a present obligation (legal or constructive) as aresult of a past event, it is probable that the Undertaking will be required to settle the obligation, and areliable estimate can be made of the amount of the obligation.

Under Solvency II and IFRS, the amount recognised as a provision is the best estimate of the considerationrequired to settle the present obligation at the balance sheet date, taking into account the risks anduncertainties surrounding the obligation. Accordingly, there are no differences between Solvency II andIFRS.

D.3.2 Deferred tax liabilities

For further details, please refer to section D.1.3.

D.3.3 Other financial liabilities

Other financial liabilities comprise of insurance and intermediaries payables, reinsurance payables, andpayables (trade, not insurance).

Under Solvency II, these are stated at fair value.

Under IFRS, trade payables comprise short-term payables which are recorded at cost and are anapproximation of the fair value of these liabilities. Accordingly, there are no differences between SolvencyII and IFRS in relation to trade payables.

See section D.1.1 for details of ceded UCA which is disclosed in other payables in IFRS but is notrecognised under Solvency II.

D.3.3.1 Leasing

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of anidentified asset for a period of time in exchange for consideration.

Under Solvency II a lease liability should be initially measured at the present value of the lease paymentsthat are not paid at the commencement date and then subsequently amortised using the effective interestmethod.

There are no differences between the valuation under Solvency II and under IFRS.

D.3.3.2 Employee benefits

A portion of pension costs are allocated from MetLife Services European Economic Interest Group (MetLifeServices EEIG), MetLife Europe Services Limited (MESL) and MetLife Slovakia s.r.o (MetLife ServicesSlovakia) and are not directly paid for by the Undertaking. These allocations are recognised as an expensewhen incurred and any related accruals are included in intercompany payables. MetLife Services EEIGand MESL make payments at agreed rates of the employee’s gross salary for each individual’s pensionfund, the assets of which are vested in independent trustees for the benefit of the employees and theirdependents.

The Undertaking makes other payment directly towards pension plans for employees remunerated atbranch level. Contributions towards these plans are recognised as an expense in the income statement.The Undertaking does not operate a defined benefit pension plan.

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D.3.4 Risk management

Information on risks relating to underwriting and reserving, asset-liability management, investment riskmanagement and liquidity risk management is set out in section C.

D.3.5 Level of uncertainty associated with other liabilities

Due to the short term nature of the other liabilities obligations, the timing of outflows of economic benefitsis known with reasonable certainty.

D.4 Alternative methods for valuation

Information in relation to assets that are not valued using quoted prices is set out in Section D.1.4.1.

D.5 Any other information

All information has been disclosed in the preceding sections.

E Capital management

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E.1 Own funds

E.1.1 Capital Management Policy

The strategic objectives of capital management for the Undertaking are:

• Regulatory compliance: to ensure compliance with the Undertaking's regulatory capitalrequirements;

• Efficient allocation: to manage and allocate capital efficiently to achieve sustainable returns andfacilitate growth objectives; and

• Financial strength: to ensure access to capital markets on competitive terms, so that theUndertaking’s overall cost of capital is minimised.

Taken together, these strategic goals strengthen the Undertaking's ability to withstand losses from adversebusiness and market conditions, enhance its financial flexibility and serve the interests of all stakeholders.

Roles and Responsibilities

• The Board has ultimate responsibility for ensuring adequacy of capital for the Undertaking. • The CEO is responsible for guiding strategy and overall corporate risk appetite and ensuring that

the right people are overseeing each function involved in capital management.• The CFO is responsible for overseeing capital reporting and financial functions, capital allocation,

and to cascade the CEO’s strategy, including risk appetite, to all relevant financial divisions. • The CRO ensures the composition and level of the Undertaking's capitalisation supports the

Undertaking's Risk Strategy and Appetite. The CRO is responsible for the systems and structuresin place to manage and monitor risks.

• The Finance Function has management responsibility for understanding capital consequencesof investment strategies and decisions and coordination with relevant Treasury and Financepersonnel to ensure that the capital considerations of investment decisions are properly vetted.

• Both the Risk Management Function and Finance Function ensure that adequate reporting is inplace and capital requirement policies are followed correctly.

Capital Management Framework

The Board is ultimately responsible for the sourcing, deployment and adequacy of capital (i.e. assetsheld other than those designated to meet policyholder and other Undertaking liabilities) and placessignificant reliance on the advice of the CFO and CRO who bear specific professional duties in this regard.

The Undertaking's capital is monitored through the capital management process and within theUndertaking's stated risk appetite limits. Any breaches of these limits is escalated in accordance withand as defined by any relevant regulatory or internal policies.

The Undertaking's risk appetite recognises the regulatory minimum standard, as it applies to technicalprovisions, own funds and capital under Solvency II, and sets the target ongoing solvency level in orderto enable the Undertaking to withstand the financial implications of adverse experience.

Risk Appetite

The Undertaking has developed key risk appetite statements which apply on an on-going basis. The RiskManagement Function reviews the Undertaking's actual risk exposure against the overall stated riskappetite on a regular basis, at least quarterly.

The Risk Appetite and Strategy identifies the agreed target solvency level and range for the Undertaking.The appropriateness of the risk appetite is evaluated as part of the Undertaking's ORSA process eachyear and is subject to change over time.

Where deviations from the defined risk appetite measures occur, the Risk Management Function providesthe Board with its opinion of the intensity of the deviation, along with a report on actions taken to addressthe deviation. Following this, the Board determines the materiality of deviations from the defined RiskAppetite measures, and whether such deviations are to be communicated to the regulator in accordancewith CBI requirements.

Capital Planning and Dividend Policy

The Finance Function develops and maintains the medium term capital plan considering the businessand risk strategies.

The capital planning process takes into account the following:

• The most recent business plan;• Material new business;• Any known management actions that are expected to materially affect the capital position;• The planned dividend payments and any scheduled capital increases; and• The outcome of the most recent Solvency II calculations and ORSA results.

Proposed dividends are considered by the Board on a case by case basis taking into account the outputof the ORSA, including the expected capital position over a 12 month time horizon and the risks to thatcapital position, but in any case would not result in the Undertaking going below its overall target solvencylevel.

Capital and Liquidity Management

The Finance Function has the responsibility of managing the excess of assets over liabilities, perestablished guidelines. Investment of such capital is subject to the portfolio objective of meeting operatingcash flow needs and generating a modest return enhancement above risk-free levels by taking moderateduration exposure and limited credit risk. Investments will generally be selected to minimise currencyexposure relative to the relevant base currency.

Investment Guidelines are in place that govern the investment options for all assets owned by theUndertaking.

64

E.1.2 Reconciliation of equity under IFRS to excess of assets over liabilities underSolvency II

The Undertaking's excess of assets over liabilities (own funds) under Solvency II is different to theshareholders' equity in the financial statements prepared under IFRS. The table summarises thedifferences at 31 December 2019:

31-Dec-19 31-Dec-19Section €'000 €'000

Assets under IFRS valuation D.1 150,975Liabilities under IFRS valuation D.3 (115,136)Equity per the IFRS financial statements 35,839

· Valuation differences on technical provisions (net) D.2 6,853· Write off of deferred acquisition costs D.1.1 (8,852)· Write off of intangible assets D.1.2 (1,029)· Net unearned commission D.1.1 (252)· Increase in deferred tax liability D.1.3 (381)· Other adjustments (4)

(3,665)

Assets under Solvency II valuation D.1 95,443Liabilities under Solvency II valuation D.3 (63,269)Excess of assets over liabilities under Solvency II 32,174

Valuation differences occur due to different basis used for Solvency II reporting compared with IFRS.See the sections referenced above for details of the valuation differences.

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E.1.3 Composition and quality of own funds

The items reported in the own funds are split into three categories depending on different factors suchas quality, liquidity and timeline to availability when liabilities arise.

Tier one own funds include ordinary share capital, non-cumulative preference shares and relevantsubordinated liabilities. Tier two own funds include cumulative preference shares and subordinatedliabilities under a shorter duration. Tier three own funds include own funds which do not satisfy the Tierone or Tier two requirements.

Composition and quality of own funds

All of the Undertaking's own funds are categorised as Tier one (ordinary share capital and share premiumrelated to ordinary share capital) for Solvency II purposes, with the exception of net deferred tax assetsof €0.06m (2018: €0.04m) which are categorised as Tier three.

E.1.4 Capital instruments in issue

Instrument Ordinary share capitalTier Tier OnePermanence YesSubordination Last upon winding upRedemption incentives NoneAmount in Issue 2,048,388Mandatory service costs NoneAbsence of encumbrance Yes

66

E.1.5 Movement in own funds

31-Dec-19 31-Dec-18 Movement€'000 €'000 €'000

Basic own fundsTier One 31,539 42,663 (11,124)Tier Two — — —Tier Three 635 42 593Total basic ownfunds 32,174 42,705 (10,531)

The Undertaking has no ancillary own funds.

Total own funds have decreased by €10.5m from €42.7m at 31 December 2018 to €32.2m at 31 December2019. The decrease in own funds is mainly driven by a dividend payment (€13m) partially offset bybusiness and capital market movements.

E.1.6 Eligible amount of own funds to cover SCR and MCR

31-Dec-19 31-Dec-18 Movement€'000 €'000 €'000

Total own funds 32,174 42,705 (10,531)

Less: Restrictions — — — Deductions — — —

Total eligible own funds for SCR 32,174 42,705 (10,531)

SCR 19,787 18,873 914

Solvency Ratio 163% 226% (63)%

Total eligible own funds for MCR 31,539 42,663 (11,124)

MCR 4,947 4,718 229

The Undertaking has no restrictions on eligible own funds.

Loss absorbencyThe Undertaking's Tier One own funds are immediately available to absorb losses. They absorb lossesif there is any non-compliance with the SCR.

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E.1.7 Reconciliation reserve - key elements

Reserve item Amount31-Dec-19

€'000Excess of assets over liabilities 32,174Own shares (included as assets on the balance sheet) —Foreseeable dividends, distributions and charges —Other basic own funds items (14,270)Adjustment for restricted own fund items of Matching AdjustmentPortfolios (MAPs) and Ring Fenced Funds (RFFs) —Reconciliation reserve before deduction for participations 17,904

E.1.8 Transitional arrangements

The Undertaking has not reported transitional arrangements.

E.1.9 Ancillary own funds

The Undertaking does not have ancillary own funds.

E.1.10 Restrictions and deductions from own funds

The Undertaking has no restrictions or deductions from own funds.

E.1.11 Own funds - RFFs

The Undertaking does not have RFFs.

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E.1.12 Own funds - Planning and management

The Undertaking's capital projection does not include any repayment of its capital items over the currentand projected planning horizon or any plan to raise additional own funds.

E.1.13 Own funds - Forecast

The Undertaking projects its capital requirements over the five year planning horizon used within theORSA process.

E.2 Solvency Capital Requirement (SCR) and Minimum Capital Requirement(MCR)

69

E.2.1 Approach to SCR and MCR

Calibration of stresses

For the purpose of this section, the Undertaking has adopted the SF approach. This method uses stressesfor each of the individual risks as calibrated by EIOPA. EIOPA also provides the standard correlationmatrices for the purpose of aggregation.

Undertaking Specific Parameters (USPs) have not been used by the Undertaking.

Use of Matching Adjustments

This is not applicable to the Undertaking.

E.2.2 Overview of SCR SF calculation

This section details the capital requirements for the Undertaking.

The assessment of the SCR using the SF approach is based on a modular approach consisting of a coreof life; non-life; market; health and counterparty default risks with associated sub-modules. These areaggregated in the SF using correlation matrices, both at the sub-module and the main module level. Anintangible asset module is then added (uncorrelated) to give the Basic Solvency Capital Requirement(BSCR). The operational risk component and adjustments for risk absorbing effect of future profit sharingand deferred taxes are then allowed for, to give the overall SCR.

Hence, the SCR is calculated as follows:

SCR = BSCR - Adj + SCRop

Where

• SCR = The Overall Standard Formula Capital Charge;• BSCR = Basic Solvency Capital Requirement;• Adj = Adjustment for Risk Absorbing Effect of Future Profit Sharing and Deferred Taxes; and• SCRop = The Capital Charge for Operational Risk.

Here, the “delta-Net Asset Value” (∆NAV) approach is used for capturing the impact of the underlying riskmodule. Note that the expression ∆NAV has a sign convention whereby positive values signify a loss.

In order to calculate ∆NAV, the base scenario as well as the stressed assets and liabilities will need tobe calculated. The cashflows for each of these scenarios is then discounted to determine thecorresponding present value of assets and liabilities. The difference between the base and the stressedassets and liabilities is the ∆NAV.

The ∆NAV is based on the Solvency II balance sheet that excludes the risk margin component of thetechnical provisions (i.e. uses only the best estimate liability component of the technical provisions).Furthermore when calculating ∆NAV the following need to be allowed for:

• Risk Mitigation techniques (primarily reinsurance).• Behaviour of policyholders (for the Undertaking, this is covered in the use of lapse rates as an

assumptions).

The Undertaking has calculated the non-life risk SCR module for its existing business and its expectednew business over the next year. Premium risk under the non-life insurance is based on expectedpremiums for the next twelve months. The stress scenarios for underwriting risks in life insurance andSimilar to Life Techniques (SLT) health insurance are instantaneous and do not allow for future newbusiness.

USPs in SCR calculation

The Undertaking is not using USPs pursuant to Article 104(7) of Directive 2009/138/EC.

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E.2.3 SCR and MCR results

SCRThe following table includes the SCR components.

31-Dec-19 31-Dec-18€'000 €'000

SCR market risk 2,558 2,726SCR counterparty default risk 3,657 2,940SCR non-life underwriting risk 14,865 14,221Aggregation (diversification effect) (3,221) (3,049)Basic SCR 17,859 16,838Operational risk SCR 1,928 2,035Diversified SCR, excluding capital add-on 19,787 18,873Capital add-on — —SCR 19,787 18,873

Note that although the Undertaking writes Health Insurance business, it does not materially impact theSCR (no impact in the Health Underwriting Risk module) due to very small size of the business. Thefigures above correspond to the sensitivities shown for each risk category in Section C, with additionalallowance for diversification as per the Solvency II SF.

The SCR has increased over the year by €0.9m from €18.9m in 2018 to €19.8m in 2019. This is drivenby an increase observed in Counterparty Default Risk (due to methodological change behind the capitalrequirement calculation and movements in the balance sheet items contributing to the CDR module) andNon-Life Underwriting Risk (due to increased business volumes mainly in Italy and Portugal) modules.

The operational risk capital is calculated based on factors applied to the technical provisions and premiumsfor each line of business underwritten. This is subject to regulatory minimum capital holdings as shownin the QRT S.26.06 SCR - Operational Risk. The full details of this calculation are given in this QRT.

MCR

31-Dec-19 31-Dec-18€'000 €'000

MCR 4,947 4,718

The MCR has increased over the year, by €0.2m.

Capital Add-Ons

The Undertaking is not currently subject to any capital add-on based on instructions from the supervisor.

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E.2.4 Treatment of participating business

This is not applicable to the Undertaking.

E.2.5 Risk mitigation techniques and future management actions

Treatment of risk mitigation techniques

Section D2 highlights the risk mitigation techniques in place for the Undertaking. In this section, wehighlight the risk mitigation techniques for which the Undertaking takes credit while calculating its SCR.

The following are the risk mitigation techniques allowed for in the SCR calculation of the Undertaking:

• Reinsurance: The business written by the Undertaking is heavily reinsured and, in particular, thecredit business (ILOE) sold in Italy, Spain and Romania is ceded to reinsurers on the basis ofproportional reinsurance treaties, with cession up to 95%. Reinsurance treaties in place includeboth arrangements with external and internal reinsurers.

Treatment of future management actions

The Undertaking has not allowed for future management actions in the SCR calculation.

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E.3 Use of the duration-based equity risk sub-module in the calculation of theSCR

This is not applicable to the Undertaking.

E.4 Differences between the SF and any internal model used

This is not applicable to the Undertaking.

E.5 Non-compliance with the MCR and non-compliance with the SCR

The Undertaking has had own funds in excess of both the SCR and MCR requirements over the reportingperiod.

E.6 Any other information

All information has been disclosed in the preceding sections.

Glossary of terms Undertaking MetLife Europe Insurance d.a.c.Board The Board of Directors of the Undertaking

Business UnitThe Undertaking's branches and any business conducted underFreedom to Provide Services

Solvency II DirectiveEuropean Commission Directive 2009/138/EC on the taking-up andpursuit of the business of Insurance and Reinsurance

A&H Accident and HealthALM Asset Liability ManagementBCP Business Continuity PlanBEC Branch Executive CommitteeBEL Best Estimate LiabilityBRC Board Risk CommitteeBSCR Basic Solvency Capital RequirementCBI Central Bank of Ireland (the Irish Regulatory Authority)CASSA Cassa Integrazione GuadagniCEO Chief Executive OfficerCF Controlled FunctionCFO Chief Finance OfficerCLAS Credit Life Administration SystemCRM Compliance Risk ManagementCRO Chief Risk OfficerDAC Deferred Acquisition Costsd.a.c. Designated Activity CompanyDR Disaster RecoveryDTC Direct-to-ConsumerEEA European Economic Area

EIOPAEuropean Insurance and Occupational Pensions Authority (theEuropean Regulatory Authority)

EMC Executive Management CommitteeEPIFP Expected Profit included in Future PremiumsERC Executive Risk CommitteeERSA Enterprise Risk Self AssessmentEU European UnionFOS Freedom of ServiceGAAP Generally Accepted Accounting PrinciplesHO Head OfficeHR Human ResourcesHRG Homogeneous Risk GroupIBNR Incurred But Not ReportedIFRS International Financial Reporting StandardsIIA Institute of Internal AuditorsILOE Involuntary Loss of EmploymentIT Information TechnologyMA Modelled AdjustmentsMAP Matching Adjustment PortfolioMCR Minimum Capital Requirement

73

MPI Mobile Phone InsuranceNAV Net Asset ValueORSA Own Risk and Solvency AssessmentPAD Provision for Adverse DeviationsPCF Pre-Approval Controlled FunctionPMC Product Management CommitteeQRT Quantitative Reporting TemplateRACC Risk, Audit and Compliance CommitteeRBNS Reported But Not SettledRFF Ring Fenced FundRM Risk MarginRSR Regular Supervisory ReportSCR Solvency Capital RequirementSF Solvency II Standard FormulaSFCR Solvency and Financial Condition ReportSLT Similar to Life TechniquesSP Single PremiumTCF Treating Customers FairlyUA Un-modelled AdjustmentsUCA Unearned Commission AssetUK United KingdomULR Ultimate Loss RatioUSA United States of AmericaUSPs Undertaking Specific Parameters

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Table of Contents

MetLife Europe Insurance d.a.c. Public Disclosure QRTs

S.02.01.02 Balance Sheet (Public Disclosure)....................................................................................................77S.05.01.02 Premiums, claims and expenses by Line of Business (Public Disclosure).......................................79S.05.02.02 Premiums, claims and expenses by country (Public Disclosure)......................................................85S.12.01.02 Life and Health SLT Technical Provisions (Public Disclosure).......................................................87S.17.01.02 Non-Life Technical Provisions (Public Disclosure).........................................................................90S.19.01.21 Non-life insurance claims (Public Disclosure)..................................................................................96S.23.01.01 Own Funds Annual (Public Disclosure)............................................................................................98S.25.01.21 Solvency Capital Requirement – (Public Disclosure).....................................................................100S.28.01.01 Minimum Capital Requirement - Both life and non-life insurance activity (Public Disclosure) ..102

75

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.c

S.02.01.02

Balance sheet

Public Disclosure

Solvency IIReclassification

adjustment

C0010 EC0021

Assets

Goodwill R0010

Deferred acquisition costs R0020

Intangible assets R0030 - - Deferred tax assets R0040 634,512 - Pension benefit surplus R0050 - -

Property, plant and equipment held for own use R0060 23,294 - Investments (other than assets held for index-linked and unit-linked contracts) R0070 44,388,533 -

Property (other than for own use) R0080 - -

Holdings in related undertakings, including participations R0090 - -

Equities R0100 - -

Equities - listed R0110 - -

Equities - unlisted R0120 - -

Bonds R0130 35,621,420 -

Government Bonds R0140 7,914,350 -

Corporate Bonds R0150 27,707,070 -

Structured Notes R0160 - -

Collateralised Securities R0170 - -

Collective Investments Undertakings R0180 13,183 -

Derivatives R0190 - -

Deposits other than cash equivalents R0200 8,753,930 -

Other investments R0210 - -

Assets held for index-linked and unit-linked contracts R0220 - -

Loans and mortgages R0230 - -

Loans on policies R0240 - -

Loans and mortgages to individuals R0250 - -

Other loans and mortgages R0260 - -

Reinsurance recoverables R0270 24,750,781 -

Non-life and health similar to non-life R0280 24,750,781

Non-Life excluding Health R0290 24,750,781

Health similar to Non-Life R0300 - Life and health similar to life, excluding health, index-linked and unit-linked R0310 -

Health similar to Life R0320 -

Life excluding Health and index-linked and unit-linked R0330 -

Life index-linked and unit-linked R0340 -

Deposits to cedants R0350 - -

Insurance and intermediaries receivables R0360 11,907,400 -

Reinsurance receivables R0370 309,464 -

Receivables (trade, not insurance) R0380 4,823,717 -

Own Shares R0390 - -

Amounts due in respect of own funds or initial fund called up but not paid in R0400 - -

Cash and cash equivalents R0410 8,605,078 -

Any other assets, not elsewhere shown R0420 - -

Total Assets R0500 95,442,779 -

76

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.c

S.02.01.02

Balance sheet

Public Disclosure

Solvency IIReclassification

adjustment

C0010 EC0021

Liabilities

Technical Provisions - Non-life R0510 33,514,584 -

Technical Provisions - Non-Life (excluding Health) R0520 33,514,584

TP calculated as a whole R0530 -

Best Estimate R0540 29,395,571

Risk Margin R0550 4,119,013

Technical Provisions - Health (similar to Non-Life) R0560 -

TP calculated as a whole R0570 -

Best Estimate R0580 -

Risk Margin R0590 -

Technical provisions - Life (excluding index-linked and unit-linked) R0600 12,329 -

Technical Provisions - Health (similar to Life) R0610 12,329

TP calculated as a whole R0620 -

Best Estimate R0630 12,327

Risk Margin R0640 2

Technical Provisions - Life (excl Health, index linked and unit-linked) R0650 -

TP calculated as a whole R0660 -

Best Estimate R0670 -

Risk Margin R0680 -

Technical provisions - index-linked and unit-linked R0690 - -

TP calculated as a whole R0700 -

Best Estimate R0710 -

Risk Margin R0720 -

Other Technical Provisions R0730

Contingent liabilities R0740 - -

Provisions other than technical provisions R0750 - -

Pension benefit obligations R0760 - -

Deposits from reinsurers R0770 - -

Deferred tax liabilities R0780 309,578 -

Derivatives R0790 - -

Debts owed to credit institutions R0800 167,012 -

Debts owed to credit institutions resident domestically ER0801 - -

Debts owed to credit institutions resident in the euro area ER0802 - -

Debts owed to credit institutions resident in rest of world ER0803 167,012 -

Financial liabilities other than debts owed to credit institutions R0810 23,885 -

Debts owed to non-credit institutions ER0811 23,885 -

Debts owed to non-credit institutions resident domestically ER0812 - -

Debts owed to non-credit institutions resident in the euro area ER0813 - -

Debts owed to non-credit institutions resident in rest of world ER0814 23,885 -

Other financial liabilities (debt securities issued) ER0815 - -

Insurance and intermediaries payable R0820 22,493,485 -

Reinsurance payables R0830 3,374,765 -

Payables (trade, not insurance) R0840 3,373,539 -

Subordinated liabilities R0850 - -

Subordinated liabilities not in BOF R0860 - -

Subordinated liabilities in BOF R0870 - -

Any other liabilities not elsewhere shown R0880 - -

Total Liabilities R0900 63,269,176 -

Excess of assets over liabilities R1000 32,173,603

77

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.05.01.02

Premiums, claims and expenses by Line of Business

Public Disclosure

Line of Business for Non-Life obligations

Medical expenseinsurance

Income protection insurance

Workers' compensation

insurance

Motor vehicle liability

insurance

Other motor insurance

Marine, aviation and transport

insurance

Fire and other damage to property insurance

General liability insurance

Credit and suretyship insurance

Legal expenses insurance Assistance

C0010 C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0110

Premiums written Gross

Premiums, claims and expenses by Line of Business Input

Premiums written

Gross - Direct business R0110 0 0 0 0 0 0 0 0 0 0 2,964,472

Gross - Proportional reinsurance accepted R0120 0 0 0 0 0 0 0 0 0 0 0

Gross - Non-proportional reinsurance accepted R0130

Reinsurer's share R0140 0 0 0 0 0 0 0 0 0 0 490,969

Net R0200 0 0 0 0 0 0 0 0 0 0 2,473,503

Premiums earned

Gross - Direct business R0210 0 0 0 0 0 0 0 0 0 0 2,921,038

Gross - Proportional reinsurance accepted R0220 0 0 0 0 0 0 0 0 0 0 0

Gross - Non-proportional reinsurance accepted R0230

Reinsurer's share R0240 0 0 0 0 0 0 0 0 0 0 490,969

Net R0300 0 0 0 0 0 0 0 0 0 0 2,430,069

Claims incurred

Gross - Direct business R0310 0 0 0 0 0 0 0 0 0 0 179,185

Gross - Proportional reinsurance accepted R0320 0 0 0 0 0 0 0 0 0 0 0

Gross - Non-proportional reinsurance accepted R0330

Reinsurer's share R0340 0 0 0 0 0 0 0 0 0 0 144,261

Net R0400 0 0 0 0 0 0 0 0 0 0 34,924

Changes in other technical provisions

Gross - Direct business R0410 0 0 0 0 0 0 0 0 0 0 11,834

Gross - Proportional reinsurance accepted R0420 0 0 0 0 0 0 0 0 0 0 0

Gross - Non-proportional reinsurance accepted R0430

Reinsurer's share R0440 0 0 0 0 0 0 0 0 0 0 0

Net R0500 0 0 0 0 0 0 0 0 0 0 11,834

78

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.05.01.02

Premiums, claims and expenses by Line of Business

Public Disclosure

Line of Businessfor Non-Life obligations

Line of Business for accepted non-proportional reinsurance Non-Life insurance

Miscellaneous financial loss

Non-proportionalhealth

reinsurance

Non-proportionalcasualty

reinsurance

Non-proportionalmarine, aviation

and transport reinsurance

Non-proportionalproperty

reinsurance

Non-Life insurance

C0120 C0130 C0140 C0150 C0160 C0200

Premiums written Gross

Premiums, claims and expenses by Line of Business Input

Premiums written

Gross - Direct business R0110 64,194,020 67,158,492

Gross - Proportional reinsurance accepted R0120 4,296,545 4,296,545

Gross - Non-proportional reinsurance accepted R0130 0 0 0 0 0

Reinsurer's share R0140 51,870,669 0 0 0 0 52,361,638

Net R0200 16,619,896 0 0 0 0 19,093,399

Premiums earned

Gross - Direct business R0210 56,580,322 59,501,360

Gross - Proportional reinsurance accepted R0220 4,366,799 4,366,799

Gross - Non-proportional reinsurance accepted R0230 0 0 0 0 0

Reinsurer's share R0240 45,493,891 0 0 0 0 45,984,860

Net R0300 15,453,230 0 0 0 0 17,883,300

Claims incurred

Gross - Direct business R0310 3,805,137 3,984,322

Gross - Proportional reinsurance accepted R0320 828,757 828,757

Gross - Non-proportional reinsurance accepted R0330 0 0 0 0 0

Reinsurer's share R0340 3,477,609 0 0 0 0 3,621,870

Net R0400 1,156,285 0 0 0 0 1,191,209

Changes in other technical provisions

Gross - Direct business R0410 -3,379 8,455

Gross - Proportional reinsurance accepted R0420 0 0

Gross - Non-proportional reinsurance accepted R0430 0 0 0 0 0

Reinsurer's share R0440 -134,885 0 0 0 0 -134,885

Net R0500 131,506 0 0 0 0 143,340

79

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.05.01.02

Premiums, claims and expenses by Line of Business

Public Disclosure

Line of Business for Non-Life obligations

Medical expenseinsurance

Income protection insurance

Workers' compensation

insurance

Motor vehicle liability

insurance

Other motor insurance

Marine, aviation and transport

insurance

Fire and other damage to property insurance

General liability insurance

Credit and suretyship insurance

Legal expenses insurance Assistance

C0010 C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0110

Expenses incurred R0550 0 0 0 0 0 0 0 0 0 0 1,670,227

Other expenses R1200

Total expenses R1300

80

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.05.01.02

Premiums, claims and expenses by Line of Business

Public Disclosure

Line of Businessfor Non-Life obligations

Line of Business for accepted non-proportional reinsurance Non-Life insurance

Miscellaneous financial loss

Non-proportionalhealth

reinsurance

Non-proportionalcasualty

reinsurance

Non-proportionalmarine, aviation

and transport reinsurance

Non-proportionalproperty

reinsurance

Non-Life insurance

C0120 C0130 C0140 C0150 C0160 C0200

Expenses incurred R0550 19,865,094 0 0 0 0 21,535,321

Other expenses R1200 0

Total expenses R1300 21,535,321

81

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.05.01.02

Premiums, claims and expenses by Line of Business

Public Disclosure

Line of Business for Life obligations Line of Business for Life reinsurance obligations

Life insuranceHealth insurance

Insurance with profit

participation

Index-linked andunit-linked insurance

Other life insurance

Annuities stemming from

non-Life insurance

contracts relatedto health

Annuities stemming from

non-life insurance

contracts other than health

Health reinsurance

Accepted reinsurance

C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0300

Premiums written

Gross R1410 565,054 0 0 0 0 0 0 0 565,054

Reinsurer's share R1420 0 0 0 0 0 0 0 0 0

Net R1500 565,054 0 0 0 0 0 0 0 565,054

Premiums earned

Gross R1510 565,054 0 0 0 0 0 0 0 565,054

Reinsurer's share R1520 0 0 0 0 0 0 0 0 0

Net R1600 565,054 0 0 0 0 0 0 0 565,054

Claims incurred

Gross R1610 32,872 0 0 0 0 0 0 0 32,872

Reinsurer's share R1620 0 0 0 0 0 0 0 0 0

Net R1700 32,872 0 0 0 0 0 0 0 32,872

Changes in other technical provisions

Gross R1710 0 0 0 0 0 0 0 0 0

Reinsurer's share R1720 0 0 0 0 0 0 0 0 0

Net R1800 0 0 0 0 0 0 0 0 0

82

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.05.01.02

Premiums, claims and expenses by Line of Business

Public Disclosure

Line of Business for Life obligations Line of Business for Life reinsurance obligations

Life insuranceHealth insurance

Insurance with profit

participation

Index-linked andunit-linked insurance

Other life insurance

Annuities stemming from

non-Life insurance

contracts relatedto health

Annuities stemming from

non-life insurance

contracts other than health

Health reinsurance

Accepted reinsurance

C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0300

Expenses incurred R1900 1,584,258 0 0 0 0 0 0 0 1,584,259

Other expenses R2500 0

Total expenses R2600 1,584,259

83

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.05.02.02

Premiums, claims and expenses by country

Public Disclosure

Home country Top 5 countries (by amount of gross premiums written) - non-life obligations Total Top 5 and home country

C0010 C0020 C0030 C0040 C0050 C0070R0010 IE ES IT RO PT

C0080 C0090 C0100 C0110 C0120 C0140

Premiums written

Gross - Direct business

R0110

0.00 23,275,030.58 22,712,342.20 9,359,454.67 7,136,496.65 62,483,324.10Gross - Proportional reinsurance accepted R0120 3,940,174.06 356,370.53 0.00 0.00 0.00 4,296,544.59Gross - Non-proportional reinsurance accepted R0130 0.00 0.00 0.00 0.00 0.00 0.00Reinsurer's share R0140 890,742.24 22,341,587.38 19,583,853.23 9,064,719.83 0.00 51,880,902.68Net R0200 3,049,431.82 1,289,813.73 3,128,488.97 294,734.84 7,136,496.65 14,898,966.01Premiums earnedGross - Direct business R0210 0.00 23,303,653.89 20,216,770.36 4,026,436.15 7,159,362.73 54,706,223.13Gross - Proportional reinsurance accepted R0220 4,010,428.14 356,370.53 0.00 0.00 0.00 4,366,798.67Gross - Non-proportional reinsurance accepted R0230 0.00 0.00 0.00 0.00 0.00 0.00Reinsurer's share R0240 890,742.24 22,368,779.52 18,329,031.69 3,915,570.64 0.00 45,504,124.09Net R0300 3,119,685.90 1,291,244.90 1,887,738.67 110,865.51 7,159,362.73 13,568,897.71Claims incurredGross - Direct business R0310 0.00 732,620.43 2,479,126.11 315,054.50 269,282.03 3,796,083.07Gross - Proportional reinsurance accepted R0320 812,498.35 16,259.41 0.00 0.00 0.00 828,757.76Gross - Non-proportional reinsurance accepted R0330 0.00 0.00 0.00 0.00 0.00 0.00Reinsurer's share R0340 503,683.79 701,392.67 2,220,296.29 60,791.34 -7.29 3,486,156.80Net R0400 308,814.56 47,487.17 258,829.82 254,263.16 269,289.32 1,138,684.03Changes in other technical provisionsGross - Direct business R0410 0.00 0.00 0.00 0.00 0.00 0.00Gross - Proportional reinsurance accepted R0420 0.00 0.00 0.00 0.00 0.00 0.00Gross - Non-proportional reinsurance accepted R0430 0.00 0.00 0.00 0.00 0.00 0.00Reinsurer's share R0440 0.00 -10,212.85 -124,672.30 0.00 0.00 -134,885.15Net R0500 0.00 10,212.85 124,672.30 0.00 0.00 134,885.15Expenses incurred R0550 1,907,422.05 3,614,549.29 5,029,469.06 1,060,879.06 6,220,913.05 17,833,232.51Other expenses R1200 0.00Total expenses R1300 1,907,422.05 3,614,549.29 5,029,469.06 1,060,879.06 6,220,913.05 17,833,232.51

84

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.05.02.02

Premiums, claims and expenses by country

Public Disclosure

Home country Total Top 5 and home country

C0150 C0210R1400 IE

C0220 C0280

Premiums written

GrossR1410

565,055.14 565,055.14Reinsurer's share R1420 0.00 0.00Net R1500 565,055.14 565,055.14Premiums earnedGross R1510 565,055.14 565,055.14Reinsurer's share R1520 0.00 0.00Net R1600 565,055.14 565,055.14Claims incurredGross R1610 32,871.37 32,871.37Reinsurer's share R1620 0.00 0.00Net R1700 32,871.37 32,871.37Changes in other technical provisionsGross R1710 0.00 0.00Reinsurer's share R1720 0.00 0.00Net R1800 0.00 0.00Expenses incurred R1900 1,584,259.76 1,584,259.76Other expenses R2500 0.00Total expenses R2600 1,584,259.76

85

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.cS.12.01.02

Life and Health SLT Technical Provisions

Public Disclosure

Insurance with profit participation

Index-linked and unit-linked insurance Other life insuranceAnnuities stemming

from non-life insurance contracts

other than health

Accepted life reinsurance

Total (Life other thanhealth insurance, incl. Unit-Linked)

Contracts without options and guarantees

Contracts with options and guarantees

Contracts without options and guarantees

Contracts with options and guarantees

Life and Health SLT Technical Provisions C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0150

Technical Provisions calculated as a whole R0010 - - - - - -

Total Recoverables from reinsurance/SPV and Finite Re after adjustment R0020 - - - - - -

Technical provisions calculated as a sum of BE and RM

Gross Best Estimate R0030 - - - - - - - -

Total Recoverables from reinsurance/SPV and Finite Re after adjustment R0080 - - - - - - - -

Best estimate minus recoverables from reinsurance/SPV and Finite Re R0090 - - - - - - - -

Risk Margin R0100 - - - - - -

Amount of the transitional on Technical Provisions

Technical Provisions calculated as a whole R0110 - - - - - -

Best Estimate R0120 - - - - - - - -

Risk Margin R0130 - - - - - -

Technical Provisions - total R0200 - - - - - -

Health insurance total Annuities stemming from non-Life

insurance contracts related to health

Health reinsurance Total Health (similar to Life)Contracts without

options and guarantees

Contracts with options and guarantees

C0160 C0170 C0180 C0190 C0200 C0210

Technical Provisions calculated as a whole R0010 - - - -

Total Recoverables from reinsurance/SPV and Finite Re after adjustment R0020 - - - -

Technical provisions calculated as a sum of BE and RM

Gross Best Estimate R0030 - 12,327 - - 12,327

Total Recoverables from reinsurance/SPV and Finite Re after adjustment R0080 - - - - -

Best estimate minus recoverables from reinsurance/SPV and Finite Re R0090 - 12,327 - - 12,327

Risk Margin R0100 2 - - 2

Amount of the transitional on Technical Provisions

Technical Provisions calculated as a whole R0110 - - - -

Best Estimate R0120 - - - - -

86

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.cS.12.01.02

Life and Health SLT Technical Provisions

Public Disclosure

Risk Margin R0130 - - - -

Technical Provisions - total R0200 12,329 - - 12,329

87

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.c

S.17.01.02

Non-Life Technical Provisions

Public Disclosure

Direct business and accepted proportional reinsurance

Medical expense insurance

Income protection insurance

Workers' compensation

insurance

Motor vehicle liability insurance

Other motor insurance

Marine, aviation and transport

insurance

C0020 C0030 C0040 C0050 C0060 C0070

Technical Provisions calculated as a whole R0010 0 0 0 0 0 0

Total recoverables from reinsurance/SPV and Finite Re after adjustment R0050 0 0 0 0 0 0

Technical Provisions calculated as a sum of BE and RM

Best Estimate

Premium ProvisionsGross - Total R0060 0 0 0 0 0 0Total recoverables from reinsurance/SPV and Finite Re after adjustment R0140 0 0 0 0 0 0Net best estimate of premium provisions R0150 0 0 0 0 0 0

Claims ProvisionsGross - Total R0160 0 0 0 0 0 0Total recoverables from reinsurance/SPV and Finite Re after adjustment R0240 0 0 0 0 0 0

Net best estimate of claim provisions R0250 0 0 0 0 0 0

Total Best Estimate - Gross R0260 0 0 0 0 0 0

Total Best Estimate - Net R0270 0 0 0 0 0 0

Risk Margin R0280 0 0 0 0 0 0

88

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.c

S.17.01.02

Non-Life Technical Provisions

Public Disclosure

Direct business and accepted proportional reinsurance

Fire and other damage to property

insurance

General liability insurance

Credit and suretyship insurance

Legal expenses insurance Assistance Miscellaneous

financial loss

C0080 C0090 C0100 C0110 C0120 C0130

Technical Provisions calculated as a whole R0010 0 0 0 0 0 0

Total recoverables from reinsurance/SPV and Finite Re after adjustment R0050 0 0 0 0 0 0

Technical Provisions calculated as a sum of BE and RM

Best Estimate

Premium ProvisionsGross - Total R0060 0 0 0 0 -40,764 23,275,535Total recoverables from reinsurance/SPV and Finite Re after adjustment R0140 0 0 0 0 38,190 21,117,653Net best estimate of premium provisions R0150 0 0 0 0 -78,955 2,157,882

Claims ProvisionsGross - Total R0160 0 0 0 0 48,034 6,112,766Total recoverables from reinsurance/SPV and Finite Re after adjustment R0240 0 0 0 0 55,774 3,539,164

Net best estimate of claim provisions R0250 0 0 0 0 -7,740 2,573,603

Total Best Estimate - Gross R0260 0 0 0 0 7,270 29,388,302

Total Best Estimate - Net R0270 0 0 0 0 -86,695 4,731,485

Risk Margin R0280 0 0 0 0 127,125 3,991,888

89

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.c

S.17.01.02

Non-Life Technical Provisions

Public Disclosure

Accepted non-proportional reinsurance

Non-Life insuranceNon-proportional health reinsurance

Non-proportional casualty

reinsurance

Non-proportional marine, aviation

and transport reinsurance

Non-proportional property

reinsurance

C0140 C0150 C0160 C0170 C0180

Technical Provisions calculated as a whole R0010 0 0 0 0 0

Total recoverables from reinsurance/SPV and Finite Re after adjustment R0050 0 0 0 0 0

Technical Provisions calculated as a sum of BE and RM

Best Estimate

Premium ProvisionsGross - Total R0060 0 0 0 0 23,234,771Total recoverables from reinsurance/SPV and Finite Re after adjustment R0140 0 0 0 0 21,155,843Net best estimate of premium provisions R0150 0 0 0 0 2,078,927

Claims ProvisionsGross - Total R0160 0 0 0 0 6,160,800Total recoverables from reinsurance/SPV and Finite Re after adjustment R0240 0 0 0 0 3,594,938

Net best estimate of claim provisions R0250 0 0 0 0 2,565,863

Total Best Estimate - Gross R0260 0 0 0 0 29,395,571

Total Best Estimate - Net R0270 0 0 0 0 4,644,790

Risk Margin R0280 0 0 0 0 4,119,013

90

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.c

S.17.01.02

Non-Life Technical Provisions

Public Disclosure

Direct business and accepted proportional reinsurance

Medical expense insurance

Income protection insurance

Workers' compensation

insurance

Motor vehicle liability insurance

Other motor insurance

Marine, aviation and transport

insurance

C0020 C0030 C0040 C0050 C0060 C0070

Amount of the transitional on Technical Provisions

Technical Provisions calculated as a whole R0290 0 0 0 0 0 0

Best Estimate R0300 0 0 0 0 0 0

Risk Margin R0310 0 0 0 0 0 0

Technical Provisions - total

Technical Provisions - total R0320 0 0 0 0 0 0

Total recoverables from reinsurance/SPV and Finite Re after adjustment R0330 0 0 0 0 0 0

Technical provisions minus recoverables from reinsurance/SPV and Finite Re R0340 0 0 0 0 0 0

91

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.c

S.17.01.02

Non-Life Technical Provisions

Public Disclosure

Direct business and accepted proportional reinsurance

Fire and other damage to property

insurance

General liability insurance

Credit and suretyship insurance

Legal expenses insurance Assistance Miscellaneous

financial loss

C0080 C0090 C0100 C0110 C0120 C0130

Amount of the transitional on Technical Provisions

Technical Provisions calculated as a whole R0290 0 0 0 0 0 0

Best Estimate R0300 0 0 0 0 0 0

Risk Margin R0310 0 0 0 0 0 0

Technical Provisions - total

Technical Provisions - total R0320 0 0 0 0 134,395 33,380,189

Total recoverables from reinsurance/SPV and Finite Re after adjustment R0330 0 0 0 0 93,964 24,656,817

Technical provisions minus recoverables from reinsurance/SPV and Finite Re R0340 0 0 0 0 40,430 8,723,373

92

ScenarioYearPeriodRep TypeRep UnitCurrency

: Actual: 2019: Annual: ECB: [None]: EUR

MetLife Europe Insurance d.a.c

S.17.01.02

Non-Life Technical Provisions

Public Disclosure

Accepted non-proportional reinsurance

Non-Life insuranceNon-proportional health reinsurance

Non-proportional casualty

reinsurance

Non-proportional marine, aviation

and transport reinsurance

Non-proportional property

reinsurance

C0140 C0150 C0160 C0170 C0180

Amount of the transitional on Technical Provisions

Technical Provisions calculated as a whole R0290 0 0 0 0 0

Best Estimate R0300 0 0 0 0 0

Risk Margin R0310 0 0 0 0 0

Technical Provisions - total

Technical Provisions - total R0320 0 0 0 0 33,514,584

Total recoverables from reinsurance/SPV and Finite Re after adjustment R0330 0 0 0 0 24,750,781

Technical provisions minus recoverables from reinsurance/SPV and Finite Re R0340 0 0 0 0 8,763,803

93

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: EIOPA: EUR

MetLife Europe Insurance d.a.c

S.19.01.21

Non-life Insurance Claims InformationPublic Disclsoure

Accident year / Underwriting year Z0010 Accident year

Gross Claims Paid (non-cumulative)

Development year

0 1 2 3 4 5 6 7 8 9 10 & + In Current Year Sum of years

C0010 C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0110 C0170 C0180

Prior R0100 357 357 357

N - 9 R0160 2,207,982 6,034,065 863,823 55,255 8,042 5,307 777 - 42 - - 9,175,294

N - 8 R0170 1,740,362 4,626,908 711,913 35,611 3,933 4,823 - 2,149 10,019 10,019 7,135,719

N - 7 R0180 1,395,268 4,096,439 1,537,429 88,082 34,996 19,346 2,278 4,250 4,250 7,178,088

N - 6 R0190 1,906,680 7,193,643 1,230,444 116,080 22,975 11,835 15,909 15,909 10,497,567

N - 5 R0200 4,292,704 6,042,976 943,032 78,827 50,820 3,600 3,600 11,411,959

N - 4 R0210 3,479,514 4,621,426 704,486 69,636 24,278 24,278 8,899,341

N - 3 R0220 2,692,605 3,519,175 576,400 74,553 74,553 6,862,733

N - 2 R0230 2,206,806 3,106,414 435,028 435,028 5,748,248

N - 1 R0240 2,446,877 2,484,889 2,484,889 4,931,767

N R0250 2,457,255 2,457,255 2,457,255

Total R0260 5,510,137 74,298,327

94

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: EIOPA: EUR

MetLife Europe Insurance d.a.c

S.19.01.21

Non-life Insurance Claims InformationPublic Disclsoure

Accident year / Underwriting year Z0010 Accident year

Gross Undiscounted Best Estimate Claims Provisions

Development year

0 1 2 3 4 5 6 7 8 9 10 & + Year end (discounted data)

C0200 C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0290 C0300 C0360

Prior R0100 431,503 431,503

N - 9 R0160 - - - - - - 265,308 254,563 242,964 242,966 242,966

N - 8 R0170 - - - - - 274,977 272,482 275,140 268,542 268,542

N - 7 R0180 - - - - 312,661 298,220 292,561 286,700 286,700

N - 6 R0190 - - - 175,722 225,008 225,952 125,049 125,049

N - 5 R0200 - - 198,524 211,069 159,679 142,955 142,955

N - 4 R0210 - 909,707 205,814 77,430 46,474 46,474

N - 3 R0220 5,356,398 999,516 202,011 60,045 60,045

N - 2 R0230 4,548,311 819,680 70,960 70,960

N - 1 R0240 4,122,092 693,694 693,694

N R0250 3,791,909 3,791,909

Total R0260 6,160,798

95

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.23.01.01

Own Funds

Total Tier 1 - unrestricted Tier 1 - restricted Tier 2 Tier 3

C0010 C0020 C0030 C0040 C0050Basic Own Funds

Ordinary share capital (gross of own shares) R0010 2,048,387 2,048,387 -

Share premium related to ordinary share capital R0030 11,586,613 11,586,613 -

Initial funds, members' contributions R0040 - - -

Subordinated mutual member accounts R0050 - - - -

Surplus funds R0070 - -

Preference shares R0090 - - - -

Share premium related to preference shares R0110 - - - -

Reconciliation reserve before deduction for participations R0130 17,904,091 17,904,091

Subordinated liabilities R0140 - - - -

An amount equal to the value of net deferred tax assets R0160 634,513 634,513

Other items approved by supervisory authority as basic own funds - Group R0180 - - - - -

Own funds not represented by the reconciliation reserve R0220 - Deductions not included in the reconciliation reserve

Deductions for participations in financial and credit institutions R0230 - - - -

Total basic own funds after adjustments R0290 32,173,603 31,539,091 - - 634,513

Ancillary Own Funds

Unpaid and uncalled ordinary share capital R0300 - -

Unpaid and uncalled initial funds R0310 - -

Unpaid and uncalled preference share capital R0320 - - -

Commitment to subscribe and pay for subordinated liabilities R0330 - - -

Letters of credit and guarantees under Article 96(2) R0340 - -

Letters of credit and guarantees other than under Article 96(2) R0350 - - -

Supplementary members calls under Article 96(3) R0360 - -

Supplementary members calls other than under Article 96(3) R0370 - - -

Other ancillary own funds R0390 - - -

Total ancillary own funds R0400 - - -

96

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.23.01.01

Own Funds

Total Tier 1 - unrestricted Tier 1 - restricted Tier 2 Tier 3

C0010 C0020 C0030 C0040 C0050

Available and eligible own funds

Total available own funds to meet the SCR R0500 32,173,603 31,539,091 - - 634,513

Total available own funds to meet the MCR R0510 31,539,091 31,539,091 - -

Total eligible own funds to meet the SCR R0540 32,173,603 31,539,091 - - 634,513

Total eligible own funds to meet the MCR R0550 31,539,091 31,539,091 - -

Solvency Capital Requirement R0580 19,786,780

Minimum Capital Requirement R0600 4,946,695

Ratio of Eligible own funds to SCR R0620 162.60%

Ratio of Eligible own funds to MCR R0640 637.58%

97

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.23.01.01

Own Funds

Total

Reconciliation reserve C0060

Excess of assets over liabilities R0700 32,173,603

Own shares (held directly and indirectly) R0710 -

Forseeable dividends, distributions and charges R0720 -

Other basic own funds items R0730 14,269,513

Adjustment for restricted own fund items of MAPs and RFFs R0740 -

Reconciliation reserve before deduction for participations R0760 17,904,091

Expected profits

Expected profits included in future premiums (EPIFP) - Life business R0770 -Expected profits included in future premiums (EPIFP) - Non-Life business R0780 4,084,671

Total Expected profits included in future premiums (EPIFP) R0790 4,084,671

98

: Actual: 2019: Annual: ECB: [None]:

MetLife Europe Insurance d.a.c

S.25.01.21

Solvency Capital Requirement - for undertakings on Standard Formula

Public Disclosure

Gross solvency capital requirement Simplifications

C0110 C0120 USP

Market risk R0010 2,558,514 NONE C0090

Counterparty default risk R0020 3,656,951 Life underwriting risk R0030 NONE

Life underwriting risk R0030 - NONE Health underwriting risk R0040 NONE

Health underwriting risk R0040 - NONE Non-life underwriting risk R0050 NONE

Non-life underwriting risk R0050 14,864,736 NONE

Diversification R0060 -3,221,498

Intangible asset risk R0070 -

Basic Solvency Capital Requirement R0100 17,858,703

Value

Calculation of Solvency Capital Requirement C0100

Operational risk R0130 1,928,077

Loss-absorbing capacity of technical provisions R0140 -

Loss absorbing capacity of deferred taxes R0150 -

Capital requirement in accordance with Art 4 of Directive 2003/41/EC R0160 -

Solvency capital requirement excluding capital add-on R0200 19,786,780

Capital add-ons already set R0210 -

Solvency capital requirement R0220 19,786,780

Other information on SCR

Capital requirement for duration-based equity risk sub-module R0400 -

Notional Solvency Capital Requirements for remaining part R0410 -

Notional Solvency Capital Requirement for ring fenced funds R0420 -

Notional Solvency Capital Requirements for matching adjustment portfolios R0430 -

Diversification effects due to RFF nSCR aggregation for article 304 R0440 -

99

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.28.01.01

Minimum Capital Requirement

Public Disclosure

MCR Components Background Information

Non-Life activities Non-Life activities

MCR (NL, NL) Result

C0010

Linear formula component for non-life insurance and reinsurance obligations R0010 2,974,649

Net (of reinsurance/SPV) best estimate and TP calculated

as a whole

Net (of reinsurance)written premiums inthe last 12 months

C0020 C0030

Medical expense insurance and proportional reinsurance R0020 - -

Income Protection insurance and proportional reinsurance R0030 - -

Workers' compensation insurance and proportional reinsurance R0040 - -

Motor vehicle liability insurance and proportional reinsurance R0050 - -

Other motor insurance and proportional reinsurance R0060 - -

Marine, aviation and transport insurance and proportional reinsurance R0070 - -

Fire and other damage to property insurance and proportional reinsurance R0080 - -

General liability insurance and proportional reinsurance R0090 - -

Credit and Suretyship insurance and proportional reinsurance R0100 - -

Legal expenses insurance and proportional reinsurance R0110 - -

Assistance and proportional reinsurance R0120 - 2,430,069

Miscellaneous financial loss insurance and proportional reinsurance R0130 4,731,485 15,475,711

Non-proportional Health reinsurance R0140 - -

Non-proportional casualty reinsurance R0150 - -

Non-proportional marine, aviation and transport reinsurance R0160 - -

Non-proportional property reinsurance R0170 - -

100

ScenarioYearPeriodRep TypeCurrency

: Actual: 2019: Annual: ECB: EUR

MetLife Europe Insurance d.a.c

S.28.01.01

Minimum Capital Requirement

Public Disclosure

Non-Life activities Non-Life activities

C0040

Linear formula component for life insurance and reinsurance obligations R0200 259

Net (of reinsurance/SPV) best estimate and TP calculated

as a whole

Net (of reinsurance/SPV) total

capital at risk

C0050 C0060

Obligations with profit participation - guaranteed benefits R0210 -

Obligations with profit participation - future discretionary benefits R0220 -

Index-linked and unit-linked insurance obligations R0230 -

Other life (re)insurance and health (re)insurance obligations R0240 12,327

Total capital at risk for all life (re)insurance obligations R0250 -

Overall MCR calculation C0070

Linear MCR R0300 2,974,908 -

SCR R0310 19,786,780 -

MCR cap R0320 8,904,051 -

MCR floor R0330 4,946,695 -

Combined MCR R0340 4,946,695 -

Absolute floor of the MCR R0350 2,500,000 -

Minimum Capital Requirement R0400 4,946,695 -

101